the plan for what you make and save
1. Upsize your income
Yes, these are supposed to be the prime earning years. If your current paycheck isn’t living up to its end of the bargain and a raise isn’t likely this year, think about adding part-time work: Even modest income gains at this point add up over time.
Say you started investing an extra $200 a month in a diversified portfolio earning 8 percent annually. By 70, that could be over $100,000 in your retirement coffers.
2. Boost your brand
Only a third of employees used career-development benefits and training, according to the “Cornerstone OnDemand 2013 U.S. Employee Report.” That’s a huge missed opportunity, especially at this age.
Even if you don’t plan on switching jobs, use those professional-development perks to meet new people and pick up skills, says career coach Nancy Collamer. In her book, Second-Act Careers, Collamer touts using your expertise to develop multiple streams of income. “It used to be that experts had one option, going to work at a college as an adjunct [professor],” she says. “Today there’s consulting, teaching, coaching, training.”
But in order to do that, you have to build your personal brand. Start now. Volunteer to speak on panels. Network professionally on LinkedIn. Launch your own blog.
3. Or prep your second act
One in four Americans ages 44 to 70 envisions being an entrepreneur, according to the Small Business Administration. If you’re one of them, get on it while your career is still active.
“Start part-time at least three to five years before you retire,” says planner Losey. “Do it in the evenings and on weekends. If it’s profitable by the time you retire, keep it going.”
4. Max out to play catch-up
Hitting 50 means that you can kick up your retirement account contributions another notch. To max out 401(k)s and similar plans, add an additional $5,500 to the $17,500 annual maximum contribution level; for IRAs, the contribution limit goes from $5,500 to $6,500. That breaks down to $1,916 a month pretax for a 401(k), and $542 a month for an IRA.
Make those IRA contributions easier by signing up to have them debited from your checking account automatically.
Next page: The plan for how you invest. »