Re­vive your 401(k) now that kids have gone

USA TODAY International Edition - - MONEY | USA TODAY MONEY - Adam Shell

Fi­nan­cial plan­ner Jonathan Knapp says it’s not un­com­mon for re­cent empty nesters to re­al­ize they’re not on track for a se­cure re­tire­ment af­ter years of fund­ing the life­styles of their de­parted kids.

Bol­ster­ing a bare or de­pleted nest egg tops Knapp’s list of things to do for par­ents once all their chil­dren have moved out and can sup­port them­selves.

“If your re­tire­ment sav­ings are not on track, this is the time to tur­bocharge your 401(k),” says Knapp, di­rec­tor of finan­cial plan­ning at Cre­ative Plan­ning in Kansas City, Kansas.

He adds: “The ma­jor­ity of fam­i­lies have not put away enough. Peo­ple tend to un­der save when the kids are at home. Now’s the time to play catchup.”

1. Bump up your sav­ings

If your 401(k) bal­ance is skimpier than it should be at your age, now’s the time to “bump up” the per­cent­age of your pay that is in­vested in your re­tire­ment sav­ings ac­count, says Mark Lamkin, CEO and chief mar­ket strate­gist at Lamkin Wealth Man­age­ment in Louisville, Ken­tucky. The max­i­mum amount you can set aside in your 401(k) in 2019 un­der IRS rules is $19,000 and work­ers 50 and older can save $6,000 more in so-called catchup con­tri­bu­tions. The limit on an­nual IRA con­tri­bu­tions is $6,000, with al­low­able catch-up con­tri­bu­tions of $1,000 if you are 50 or older.

2. Get the match

Don’t pass up free money from your em­ployer, ad­vises Tony Ogorek, founder and CEO of Ogorek Wealth Man­age­ment in Buffalo, New York. That means at least sav­ing enough on your own in your 401(k) to take ad­van­tage of your em­ployer’s full match­ing con­tri­bu­tion.

3. If pos­si­ble, max out

The more you save, the quicker you can re­plen­ish and re­build your nest egg, says Di­a­hann Las­sus, pres­i­dent of Las­sus Wher­ley, a wealth man­age­ment firm with offices in New Prov­i­dence, New Jer­sey, and Bonita Springs, Florida.

4. Play catch-up

If you’re over 50, the IRS lets you save an ad­di­tional $6,000 in your 401(k) with be­fore-tax dol­lars in what is dubbed “catch-up” con­tri­bu­tions. Sav­ing more will help you reach your goal of hav­ing enough cash to re­tire.

5. Keep spend­ing in check

Sure, you’ll likely have more money left­over at the end of the month now that you’re no longer sup­port­ing kids. But if you blow all the cash on va­ca­tions, you’re just go­ing to dig your­self into a deeper finan­cial hole, ac­cord­ing to re­searchers at the Cen­ter for Re­tire­ment Re­search.

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