I recently watched this amazing IGTV from the Jamaican entrepreneur and life coach, Nicole McLaren Campbell. She was saying that someone sent her a DM on Instagram stating that she had fallen “behind” and hadn’t achieved enough by her age of TWENTY years old. Can you imagine?

Nicole proceeded to tell her the world was her oyster and she had so much time ahead of her (which was obviously true). It reminded me though, that so many people do this to themselves with their finances. Now there are very real effects to waiting longer to begin saving and investing, but I really don’t think that it’s ever “too late” to begin saving for retirement. After all, is it better to just throw your hands up and say that it’s not even worth a try anymore? I doubt it. What IS worth it is to accept your shortcomings, and roll up your sleeves to get to work.

So for all of you who are feeling behind on your retirement savings, I am going to give you six actionable tips you can take which I think can really make the difference for you long-term.

1. Run an online calculator to see if you actually ARE behind. Here is one that I like.

2. Revisit current 401(k) contributions. What are you currently contributing? Commit to increasing it at least 1% TODAY and see if you barely miss that extra money your next pay period.

3. Take advantage of automatic increases. Most employers will allow you to elect for automatic increases to your 401(k) contributions. Sign up to have that increase by 1% every year until you are at least contributing 10-15%.

4. Open a traditional or Roth IRA. The type will depend on your individual tax situation and might be subject to income limits, but it’s a great way to stash extra money if you need to save more than the max in your 401(k) or you have extra cash flow.

5. Explore a mega backdoor Roth. If you are contributing the max to your 401(k) ($19,500 in 2020) but are high-income enough to afford to be able to save more, look into whether your 401(k) at work allows for after-tax contributions. These are the best-kept secret for those who want to contribute to a Roth but might be too high income. The IRS allows you to contribute up to $57,000 to an employer plan in 2020. This includes the normal $19,500/year + whatever your employer matches + your after-tax contributions(similar to a Roth). The after-tax contributions don’t reduce your taxable income, but they do allow you to put more money away in tax-advantaged accounts. This article explains it in greater detail.

6. Set up a taxable brokerage account. This is going to be the least-advantageous solution because any trades, dividends, interest, or gains are going to be taxable in this type of account. However, if you’re really serious about putting away as much money as you can for retirement, or want to have more flexibility in the types of accounts you have, then this might be right for you!

Are you unsure of how to go about this or want more support? Reach out to me to schedule a free introductory call!