Retirement might still seem far away in your 40s, but the reality is it’s closer than you think. That means it’s time to start making moves to set yourself up for success. Here are some steps to take to ensure your retirement is as comfortable as possible.
Maxing out retirement accounts can be difficult. It’s a lot of money to set aside per year. If you haven’t been able to hit the max before, try to make your 40s the decade you do it. For an IRA, the max is $6,000 per year. For a 401(k), the max is $20,500. As USA Today suggests, you can make it easier on yourself by setting up automatic withdrawals. That way those funds are out of sight, out of mind.
Go In On Dividends
Hopefully you’re already invested in the market, but your 40s are a good time to go in on dividend stocks. These are great because the dividends you gain can be reinvested, and then cashed out and used as income once you retire. Also, companies that pay dividends are usually stable, strong businesses. That’s a good place to be invested.
Open an HSA
Healthcare costs in retirement can be a huge obstacle. Give yourself a shot at clearing that challenge by opening up a Health Savings Account (HSA). If you qualify — you must have a high-deductible health insurance plan — an HSA can give you several advantages. Your contributions and investment gains are tax-free. Withdrawals are also tax-free when used for qualified medical expenses. Make these moves in your 40s so your 60s, 70s, 80s and 90s are more enjoyable.