As employees approach retirement age, they may realize they are financially unprepared for the years ahead. Whether it be due to unexpected life events, financial setbacks, or procrastination, falling behind on retirement savings can be overwhelming. Late-career employees facing retirement without adequate preparation can take steps to regain control and build a solid foundation for their retirement journey.
One crucial step recommended by Forbes Finance Council members is to put together a detailed financial plan that includes the remaining time in the workforce and expected retirement. This plan should be thorough in forecasting future expenses to be incurred, including regular living expenses and major planned expenditures like education or weddings.
Late-career employees should assess their current financial situation, including evaluating savings, investments, and anticipated retirement expenses. Developing a concrete plan to increase savings and seeking guidance from a financial advisor can help establish a realistic retirement strategy. Analyzing spending, maximizing dollars to invest, and contributing to a 401(k) plan are strategies recommended to build a solid financial foundation.
Maximizing contributions to a 401(k) plan, taking advantage of employer matches, and contributing to an IRA are recommended to accumulate more savings. Employees are advised to understand the gaps in their current plan, such as total savings, potential retirement income sources, expected expenses, and the duration their savings need to last. Establishing a retirement plan that addresses any gaps and sets realistic savings and investing goals is essential.
Late-career employees are advised to maximize employer match and HSA contributions, as this can provide immediate returns and triple tax savings. It is recommended not to rush into hasty decisions but seek guidance from financial advisors or retirement specialists. Identifying all expenses, understanding risk tolerance, establishing objectives, and creating a budget that supports one’s lifestyle are important steps towards retirement preparedness.
Starting as soon as possible, evaluating financial standing, determining savings goals, and creating a stock and bond portfolio are actions late-career employees can take to prepare for retirement. Regularly checking in with a financial advisor, establishing a passive income portfolio, maximizing savings, and making catch-up contributions to retirement plans are recommended steps for employees who find themselves unprepared for retirement late in their careers.
