Holiday season is here again. The new year is almost upon us, and 2018 will soon be in the rear-view mirror. You’re probably busy right now looking for the perfect gifts for your friends and loved ones. However, you also may want to take some time at the end of the year to give a gift to yourself.
What’s the perfect gift for yourself this holiday season? Perhaps the latest gadget or new clothes? Maybe even a vacation? While those ideas are all valid, consider something that will make a lasting impact on your future: increased retirement savings.
If you’re concerned about your retirement savings, you’re not alone. According to a Gallup survey, 54 percent of Americans are worried about not being able to afford retirement.1 The holidays may not traditionally be the season of financial planning, but the year-end represents an ideal time to make changes and take action.
Give yourself the gift of a solid retirement strategy this holiday season. A financial professional can help you conduct a full review and recommend possible changes. Below are a few steps to consider:
Max your contributions to your IRA.
An IRA is a popular and effective retirement savings tool because it offers a wide range of tax benefits. You may be able to deduct your contributions to a traditional IRA. Your earnings in the account also grow tax-deferred until you take a distribution. In a Roth IRA, you don’t get deductions for your contributions, but you do get tax-deferred growth and tax-free withdrawals after age 59½.
In 2018 you can contribute up to $5,500 to either a traditional or a Roth IRA. That number increases to $6,500 if you’re age 50 or older. In 2019 those limits increase to $6,000 and $7,000, respectively. If you haven’t hit your limit for 2018, you have until April 15, 2019, to do so. Look at your budget and consider giving yourself an IRA contribution this holiday season.2
Increase contributions to your 401(k).
Do you participate in an employer 401(k) plan? In 2019 the maximum contribution increases, so you can put away even more money. The new 401(k) maximum contribution will be $19,000 next year. If you’re age 50 or older, you can contribute an additional $6,000 in catch-up contributions.3
Of course, not everyone can afford to put $19,000 per year into a retirement plan. However, even a small increase in your contribution can have a big impact. Look for ways to gradually raise your contribution rate over time. You can get a head start by increasing your contribution this holiday season.
Get a retirement income projection.
How much income will your savings produce in retirement? How much income can you expect from Social Security or a pension? If you don’t know the answers to these questions, you may want to meet with a financial professional to develop a retirement income estimate.
A financial professional can project your potential income from Social Security, a pension, savings or other sources. That can help you determine whether you’re on the right path or if you need to make adjustments. You could also examine tools to protect your income, like an annuity.
Ready to take control of your retirement strategy this holiday season? Let’s talk about it. Contact us today at Grand Canyon Planning Associates. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.