You’re hitting the home stretch

With about 10 or 15 years to go until retirement, the kids are leaving and you’re at/near your peak earnings. This is an excellent time to rev up your savings effort – including making catch-up contributions to your 401(k) and IRA/s.


Catch-up contribution option to retirement plans enable savers age 50 and over to increase contributions when retirement draws near. Age-50 catch-up contributions are possible in 401k, 403(b) and 457 plans, and IRAs, but the rules differ among plans. 

On the investment front, however, you face a delicate balancing act. You still need capital growth because you’re investing not just until you reach retirement, but for the years you’ll spend in retirement too. But you also need to protect the money you’ve accumulated so far. The way to balance those needs isn’t to try time moves in and out of cash, bonds or defensive sectors. Time to settle on a mix of stocks and bonds that can give you a decent shot at long-term growth while providing enough shelter so that you’re not hammered when the market goes south. Generally, that means keeping roughly 60% to 65% of your portfolio in stocks and the rest in bonds.

You also need to begin thinking about gauging how much income you can realistically generate in these accounts. By plugging in such information as your account balances, how much you’re saving, your estimated Social Security benefits and your investment mix, an online tool such as Fidelity’s Retirement Income Planner can help you estimate how much income you can reasonably count on in retirement. (The tool is free, although non-Fido customers must register.)

Here are a few more ideas to Increase Your Nest Egg.

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