Posted September 28, 2013 by Michael J. Kora in Hot Topics

Behind in saving for retirement? Approaches to catching up

Does the pace of your busy private and expert life leave you feeling like you&rsquore often playing catch up? From lastly reading that best-seller that&rsquos been sitting on your book shelf for a year to obtaining a solid eight hours of sleep to producing confident you have sufficient money set aside for the future, it can be difficult to regain lost ground. If you have been among the millions whose retirement savings and investments suffered during the recession, there&rsquos very good news: you can start to catch up with a handful of easy actions.

On average, infant boomers say they have saved or invested $ 275,000 for retirement, but think they&rsquoll need to have a median of $ 750,000 to reside comfortably, according to a Boomers & Retirement Survey released by TD Ameritrade, Inc. (&ldquoTD Ameritrade&rdquo), a broker-dealer subsidiary of TD Ameritrade Holding Corporation (NYSE: AMTD). That means some boomers could face a shortfall of practically a half a million dollars as they head into retirement.

Sensible retirement planning, thoughtful alternatives and a handy &nbspoption named a &ldquocatch-up contribution,&rdquo can support boomers regain ground lost for the duration of the recession. A catch-up contribution enables men and women older than 50 to improve their contributions to their IRA or employer-sponsored retirement plans beyond the usual limits for such tax-deferred retirement plans.

&ldquoAnyone approaching retirement should take into account various possibilities, like catch-up contributions, that may make sense for their retirement investing plans,&rdquo says Lule Demmissie, managing director, retirement, TD Ameritrade. &ldquoThese catch-up contributions could help workers 50 years and older save thousands much more &ndash probably even hundreds of thousands of dollars more &ndash toward their retirement. When arranging for retirement, each dollar counts, especially when it&rsquos going into a tax-deferred automobile.&rdquo

Demmissie delivers some guidance for baby boomers approaching retirement:

* There is no regular target amount for retirement. When setting a target for your retirement investing or savings, you need to have a realistic concept of how significantly you&rsquoll require to keep the normal of living you need in retirement. On-line calculators and tools, like those discovered on TD Ameritrade&rsquos on the web retirement center can help you set ambitions by exploring numerous genuine-globe scenarios that may possibly influence your assets more than time and at retirement. For instance, do you have overall health challenges that may possibly generate health-related expenses? Possibly you and your spouse would like to travel when retired. Distinct objectives and circumstances will influence how considerably you&rsquoll need to have to save in order to live comfortably.

* Don&rsquot rely on Social Security positive aspects, but don&rsquot overlook them, either. They ought to be a part of your all round retirement program, but not the heart of it. However, 65 % of retired boomers said they rely on Social Security rewards, and almost a single-third stated they wouldn&rsquot be able to reside comfortably without these payments, according to TD Ameritrade&rsquos survey. &ldquoThe greatest way to steer clear of getting to rely entirely on Social Safety is to set a retirement savings objective and operate toward it prior to retiring,&rdquo Demmissie says.

* Take benefit of catch-up contributions. As extended as you will be 50 (or older) by the end of the calendar year, you could be eligible to contribute an extra $ 1,000 per year toward your IRA until you turn 70 (which is the final year to contribute to a classic IRA). If you save an further $ 1,000 per year for 20 years and get a five percent price of return, you could have an extra $ 34,719 toward retirement. Completely fund your IRA with $ 6,500 a year among ages 50 and 70, and that could quantity to an additional $ 225,675 for retirement.

&ldquoRemember, it is never also late to commence organizing for retirement,&rdquo Demmissie says. &ldquoIf you seasoned monetary setbacks that stalled your retirement efforts, it could just mean you have to adjust your retirement expectations, function a small longer or think of other implies of help that you may possibly have not regarded as before. But it&rsquos never ever as well late to get started.&rdquo

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Michael J. Kora