Catching Up Your Retirement Contributions

The current recession has many people rethinking how their finances are going. One of the items that has intruded itself on many people’s consciousnesses is the fact that a secure retirement should be planned for. But what happens if you haven’t been saving for retirement ? Or, what if you have cut back your retirement account contributions due to worry over the stock market? The good news is that you can still catch up. But it may not be easy.

Investing now, while the market is on sale

Despite concerns about the stock market, now is a good time to invest. If you are worried about picking the right stocks, there is the possibility of index funds to help you along. There are also ETFs, which are a little riskier, but may help you reach your retirement goals a little faster. Over time, the stock market gains. If you can hold off on taking distributions, or if you have a long time frame, you are quite likely to see solid returns. In fact, since the stock market has made some gains this year, you might find that your retirement account is beginning to recover already.

Putting as much as you can into retirement accounts

Another thing you should do to help catch up your retirement contributions is to put in whatever you can. If possible, max our your contributions to accounts. And go beyond just the 401k. If you are eligible, open up an IRA . Open one up for your spouse as well. You should have as many tax-advantaged retirement accounts as possible in order to maximize your retirement savings. Also, remember that if you are at least 50, you can put in extra “catch-up” contributions of $5,500 for a 401k and $1,000 for an IRA. If you feel as though you are behind, be sure to take advantage of this provision.

The key is to put in what you can, while you can, and try to make up for lost time with increased retirement contributions. And with things the way they are now in the markets, you are more likely to get a better bang for your buck .

image source: bransorem via Flickr