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Middle-aged and Broke? 3 Ways To Get Your Retirement Fund On Track

It's never to late to start preparing for retirement.

I had a laugh the other day when my 17 year old son was teasing me and said “Mom, you’re old!”. I giggled and said, “I’m not old, I’m middle aged and just hitting my prime!” I reminded him that I was just only 48, and had lots of life left in me. Then I started thinking about how I did, indeed have lots of life left in me, but not lots of money to live it.

I have been a stay at home Mom for more than 20 years. I’ve had some income come in, but for the most part my husband has been the main breadwinner in our family. He has a decent retirement plan, but I realized that I didn’t have one, and I probably should. I began looking up ways that I could start preparing NOW for my future.

It’s never too later to start!

I reached out to Elisabeth Dawson, founder of COPIA Wealth Management & Insurance Services and author of Wealth By Design for some tips on how to gt back on financial track. At this point in my life, my circumstances are a lot different than say, a 24 year old, single person. Let’s face it, I have 2 college aged kids, and both my husband I have health challenges that cost quite a bit. I figured without a healthy retirement fund already I was doomed, but it’s not true. Elisabeth shared some great tips!

3 ways to get your retirement on track

  • Prioritize your retirement  This is the most important thing to learn. Your retirement will be here before you know it. Not only that, but it could be longer than you ever imagined. It’s been estimated that today’s retiree will spend about 1/3 of their life in retirement, so avoid the temptation to procrastinate in planning for this important phase of your life. (If you didn’t don’t freak out, just get moving!) Keep your retirement plan contributions as a high priority and don’t sacrifice maximizing your contributions in order to build up your savings, buy a new car, or pay for your children’s college tuition. If your employer doesn’t offer Roth IRAs, look into setting up one for yourself so you are not only making the most of any employer match through your 401k/403b, but also using after-tax contributions to create future retirement income which will be tax-free upon withdrawal.
  • Help your children consider options for college Encourage your children to start thinking about college early in order to maximize their options. Your situation can vary based on location but, in many cases, starting at a community college close to home is often an economical way for students to get their feet wet in their chosen study program. This can cut down on costs before transferring to a more expensive university, which may require additional housing expenses as well. There are also countless scholarship and financial aid programs available so the earlier you get started researching requirements and eligibility, the better off you’ll be. For example, at last count, 17 states now offer tuition-free community college programs to eligible high school graduates. Have your child take the lead, but check in often to offer your guidance and support throughout the process.
  • Take advantage of FSAs/HSAs  Participating in tax advantaged accounts such as Flexible Savings Accounts (FSAs) and Health Savings Accounts (HSAs) is a smart way to make the most of your money when it comes to paying costly healthcare expenses. While FSA balances expire at the end of each year, HSAs can accrue over time and provide tax-deferred growth, while also reducing your taxable income. Make sure you have a thorough understanding of how your accounts work, as well as staying up-to-date on what medical expenses are and are not covered.

These tips gave us a good starting point. Number one is the most important. As a homeschooling Mom, I don’t have time for a job outside the house, but I have started picking up a few part time things to make some extra money, and it all goes into a Roth IRA. Also, there were a lot of ways I could make extra cash- like selling a lot of the stuff I de-cluttered from my annual after Christmas de-cluttering spree, and putting aside the money I saved using coupons or not eating out into my Roth. It may seem like its small amounts, but they add up! The plan is also to get a part time job after our youngest graduates to put away money for retirement.

Neither of our children were interested in attending college. Our oldest has started her own successful business, and our youngest plans on attending technical school once he graduates. He’s already figured out a plan on how to pay for it, and to get out of school debt-free, and in fact, making money. I’m sure we’ll help him some, but he’s taken on the responsibility for his secondary schooling on himself.

The healthcare account is something I hadn’t thought of, but completely makes sense. As we get older and require more healthcare, having an account will save us quite a bit of money in the long run. Let’s face it, the cost of healthcare is only going up, and anything we can do to help is a win!

To be honest, I was worried about my retirement. I know that starting now won’t get me as far as if I had started in my 20’s, but every step I take now will help protect me as I grow older.

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