Savings Plans for Those Hitting Half Century of Their Lives

retirement (Photo credit: 401(K) 2013)

If you will be reaching the age of 50 this year, it is assumed that your savings for the rest of your life is already halfway through. However, the chances are that you are lagging behind in the savings area and need to start collecting money for your future. The good news is that there are plans which give opportunity to you to work on your financial security for post-retirement life.

Making Contributions:

It is possible that you decide to make savings for post-retirement life at a later stage of your life. You are not an exception and there are many who like you, have just begun with their savings. The concept of ‘catch-up’ is applicable to such citizens who are 50 years or above in age so that they can make contributions above the limit decided for various savings plans.

You may have just reached 50 years of age but you still have a window of opportunity for adding to your savings by making contributions to any IRA or by making ‘salary deferral’ contributions to a 457 plan or 403(b) or a 401(k) plan.

IRA Contribution- To make IRA contribution you can either opt for 100 % compensation or lesser part of $5500. But for those who will reach 50 years you can make additional contribution of $1000 to the account.

Plans Sponsored by Employers- For plans that are employer-sponsored you are granted the permission to make more contributions that the limit that is set only if you are to reach 50 years with the end of the year- a privilege only to those that are of and above 50 years.

• In case of 401(k) and SIMPLE IRA plan where you are allowed to make deference of 100% of the compensation up to an amount of $12,000, you can make a payment of extra $2,500.
• In case of 457, 403(b) and 401(k) plans where the deference amount can reach up to $17,500 an additional amount of $5,500 is allowed for those that are 50 and above in age. 

Multiple Plan Limitations:

While participating in more than one plan that is employer-sponsored, contributions made through the ‘salary deferral’ features should not surpass the ‘dollar limit’ that is applicable for the particular year.

Miscellaneous Issues:

There are other issues too that have effect on all that you plan for your retirement like sponsoring your child’s college tuition fees or supporting your fully-grown child rather than adding to your savings for life after retirement. You might as well think of investing in ‘long-term care’ or LTC insurance for prevention of retirement savings usage to cover long-term illness expenses rather than using it to finance your retirement life.

Conclusion:

Hopefully the ideas mentioned in the above paragraphs will help you to make your life post-retirement a financially independent one. Those of you who fall in the range of mid-forties and mid-fifties, you still have the time to retrace your steps and make financially wise decisions. You should consider investing in insurance plans to cover unexpected expenses like accidents. This will help you to financially secure your post-retirement life.

Author’s Bio: Alisa Martin has been authoring articles on various subjects related to finance. She has knowledge on Second Citizenship for investors and other such topics for contributing articles.