When the clock is ticking down towards retirement, making sure you’ve dotted all the i’s and crossed all the t’s is a must. Taking a close look at where you’re at financially can give you an idea of how prepared you are and what you may need to work on. If you’ve got five years left to go, there are a few things in particular that you should be paying attention to.
1. Take advantage of catch-up contributions
Once you hit the big 5-0 you can start taking advantage of catch-up contributions to funnel even more money into your retirement account. As of 2015, the catch-up limit for 401(k) plans is set at $6,000, which brings the total amount you can contribute for the year to $24,000. If you’ve got a traditional or Roth IRA, you can throw an extra $1,000 in on top of the $5,500 annual limit.
If you’ve got five years left until retirement, being able to stash an additional $25,000 into your employer’s plan or $5,000 into an IRA can make a big difference in the size of your nest egg down the road. Maxing out your catch-up contributions can also work in your favor at tax time if you’re able to deduct the amount you’re putting in.