Many people today have reached their 40s and don't have a good retirement plan in place. The good news is that it isn't too late to start and WSECU's Suzanne Klenk, who is a certified financial coach, provides some of the tools to help turn things around.
Options for those in this situation
Extend your retirement date.
Consider part-time retirement - when you retire from your current job, find a part-time job to supplement your income.
Plan for the unexpected - start saving right now.
Saving: the easiest and the hardest step Saving money is easy because it's simple math - we know we have to take a portion of our paycheck and set it aside for the future. It's also the hardest step because saving money isn't a habit for many of us. Making a commitment and the decision not to spend what we make is difficult. An effective way to do this is not to include the amount you want to save in your budget. Determine how much you're going to save, subtract that amount from your paycheck and then budget with the money you have left.
Set up a savings plan Financial planners have long said that we need to set 10-15% of our income aside. However, for those who are starting to save later in life, this can be a formula to fail because it's so overwhelming. If you're in this scenario, just start small. Set aside as much as you can without having to take it out of savings at the end of the month or use your credit card to make ends meet. The priority is to start the habit of saving...you can put larger amounts of money aside as time goes on.
Other ways to save
If you're in the habit of using your credit cards to make purchases, stop charging and only buy things you can afford by paying cash.
Create a spending plan.
Pay off your existing debt.
Once you've paid off your debt, start planning for your future in earnest. Find a good financial planner who can help coach you through the steps.
Have a financial question for Suzanne? If you have a financial question you would like to ask Suzanne, please feel free to send her an e-mail.