Catch Up on Retirement Savings

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: Discover effective ways to catch up on retirement savings with safe money alternatives. Start planning for a secure future today! In the past, we’ve looked at retirement planning strategies for specific populations, like self-employed Americans or women . But what if someone is part of the segment of Americans who aren’t that well-prepared for retirement? According to a survey conducted by BankRate.com, 36% of surveyed adults say they didn’t have a penny saved for retirement. Around 25% of the people aged 50-64 in the survey reported they had yet to start their retirement savings. These findings are consistent with data found in previous surveys. In fact, previous data shows there’s a wide gap between Americans’ retirement expectations and what they’re actually prepared for. A big part of it is because many American households live paycheck to paycheck. So what steps can you implement to catch up on retirement savings? Read on for some helpful tips. Effective Strategies for Catching Up on Retirement Savings Here are some strategies that you can use to close the retirement savings gap. Take advantage of tax-deferred accounts One simple way is capitalizing on the benefits of a 401(k) and an IRA. Current annual contribution limits are set at $18,000 for a 401(k) and at $5,500 for an IRA. If you’re over 50 years old, you can contribute up to an extra $6,000 into a 401(k) and an extra $1,000 into your IRA. Taking the money directly out of your paycheck will help you keep on track with your goal. Consider alternative vehicles for stashing retirement savings What about high-income earners or people with just a few years left over to catch up? Traditional retirement accounts have set contribution limits that make it more difficult to accelerate savings and keep it safe from taxation. For people in this situation, other vehicles, such as annuities, can be used for tax-advantaged savings. They also offer the ability to help you meet retirement financial and income goals later on. An annuity allows for additional, pre-tax savings to be put away. However, that doesn’t mean it is for everyone. Be sure to receive guidance from a qualified financial professional if considering this option. Wipe out the debt Saving is an optimal goal. But it’s also important to remember debt wi