Talk with your plan administrator
Contact your employers benefit representative to learn the details of your plan. In summary, you must first reach the statutory limit of $15,500 in 2008, or other required limit before you are eligible to make catch-up contributions. Furthermore, employers are not required to match catch-up contributions.
Pay Yourself First
The catch-up contribution is a great opportunity to invest more dollars into your retirement account. However, some 50-year old individuals are embarking on life-changing financial events in their personal lives or careers, where they are in the midst of starting a new marriage or second family, going through financial upheaval from a marital divorce, finishing a first or second college degree, trying to pay down credit card debt, making mortgage payments on a new home or second mortgage, providing for adult children who remain or return home, or suffering the loss of a spouse. Even in light of these pressing circumstances, try to turn your attention on your future retirement needs. Its easy to be distracted by these tough and emotional matters, but you need to consider your own financial future as well.
Talk with your personal financial advisor
If you are faced with any of these financial challenges and feel that you just cannot make additional contributions, talk with your employers benefit representative or your personal financial consultant for advice on how to take advantage of this provision. Now is the timeits not too late.
Assets
An investment is an asset (money or something of value) set aside for future sale or use. Examples: savings accounts, property, stocks, bonds, mutual funds, individual retirement accounts (IRA), pension funds, emergency funds, rare coins, precious metals, and gems.
Balance
While it is very common for most people to have credit card debt and owe bills, it is important to pay down your debt. As you reduce your debt, the value of your investments will increasemuch like tipping a weighing scale
Career
Your ability to earn money from gainful employment or entrepreneurship is one of your greatest assets. While you may have graduated from college many years ago, its important to protect your investment in your career by taking continuous training or retraining to remain competitive in the job market.
Diversify
According to the old adage, you should never put all your eggs in the same basket. Avoid investing all your funds in the same type of investment or the same type of industry.
Expenses
Expenses are payments and chargesfor tangible and intangible itemsnecessary and unnecessarythat cause money to come out of your wallet, bank account or other reserve. Its important to evaluate your spending to determine where you can eliminate unnecessary
Growth
When making an investment, it is important to realize whether it will grow at a steady and continuous pace (e.g., interest rates on bank accounts) or will the investment be affected by market trends (e.g., real estate and stocks).
According to Marotta Asset Management, everyone should compute their net worth once a year. They also state that, By age forty-five you should be worth at least five and a half times your annual spending. Between 40 and 60 you should increase your net worth by half your annual take home pay every year. What does this exactly mean for the net worth of an average 40-something?
Your income is expanding in your 40s, as well as your debt. This is at least typical in America today. There is also less time to recover from financial mistakes. The median income for 40-something households, nearly $58,000, is about 20% higher than for 30-something households, according to the Federal Reserves latest Survey of Consumer Finances.
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