For Boomers Who Have Failed To Save For Retirement, Here Are Some Saving Graces

Wednesday, November 21, 2012 07:54
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For Boomers Who Have Failed To Save For Retirement, Here Are Some Saving Graces

It’s no secret that many Boomers have failed to save enough for retirement. There are 10,000 people reaching the retirement age of 65 every single day. This will continue for the next 17 years.
 
There are Boomers between the ages of 55 and 65 who have yet to begin saving. Yet there are ways these investors can boost their savings, take advantage of tax breaks, and keep an eye out for the unexpected.

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For example, after Boomers hit 50, they can contribute an extra $5500 on top of the $17,000 allowable contributions to employer-based retirement plans.
 
They can also contribute $6000 to their Roth IRAs in 2012 and $6500 in 2013. If a Boomer leaves a job after age 55, they will not be subject to the 10% withdrawal penalty imposed by the Federal government on early withdrawals.
 
Those who have lost a spouse can begin collecting Social Security survivor benefits at age 60 although those benefits will not be as great as they will be if they wait to retirement age to collect.
 
At age 66, Boomers can begin collecting Social Security benefits without any limitations from earnings cap restrictions.
 
Retirement credits for waiting to receive benefits end at age 70. That’s also the age the IRS forces retirees to take withdrawals from traditional IRA accounts or face a 50% penalty. There is no such requirement for Roth IRAs.
 
Knowing these advantages and limitations can help you design an effective catch-up strategy for those clients who have, for one reason or another, so far failed to prepare.

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