5 Tips To Save For Retirement If You Started Later In Life

Mornings on the beach, golfing with friends, picking up an old hobby… retirement is an exciting life stage for many Americans. However, if, for whatever reason, you started later than most in your retirement savings, you may feel like you’ll never be able to achieve that much-deserved reprieve.

If this applies to you, don’t worry. If you’re starting late, you’re not alone, and there are countless strategies out there to help maximize savings in the time you have left. Above all, know that it’s not too late to save — and the best time to start is now.

Figure Out How Much Savings You’ll Need
Experts suggest withdrawing no more than 3-4 percent of your savings for each year of your retirement. Calculate your year budget and expenses, and multiply that by the number of years you’ll be in retirement to determine a baseline savings amount. For example, if your yearly budget is $30,000, and you expect to be in retirement for 20 years, you should set a goal of $600,000 for your savings.

Use Compounding Interest To Play Catch-Up
When you start saving in your first years of employment, it’s harder to contribute more than the minimum amount. This is because your income and wages are usually at their lowest. If you’re starting later, your presumably higher income can help you to contribute more per month, which will help you in the long run due to compounding interest.

Don’t Take On Too Much Risk
Traditional retirement accounts offer a 7 percent return on your investment. While there are other investment options that may offer you more return on your investment, you may also lose your principal at a time when it is incredibly risky. Consider diversifying your portfolio and, if you do invest in more risky options, make sure you have enough saved in other places to protect you in case of emergency.

Pay Down Your Debts Now
Though it may be tempting to focus all your extra income on saving for retirement, it’s important not to forget about your present-day debts. These balances will only increase over time, so paying them down now will save you money and hassle in the long run. Improving your credit score will also allow you to (hopefully!) pay less interest if you decide to purchase a new home during your retirement.

Take On A Balanced Approach
As stated before, there are many tempting ways to make a quick buck that may be tantalizing if you are starting your retirement savings later. However, losing your principal investment at this point could be devastating. Remember that along with your own investment, you may be eligible for Social Security from the federal government, and you can continue to collect on other investments even after retirement.

If you’re still feeling confused or conflicted about saving for retirement, an expert at Donohoo Accounting Services can help. We’ve been assisting our clients with their financial and tax needs for more than two decades. Contact us today to schedule your free consultation! For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!

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10 Tips for Navigating Open Enrollment

Beginning each fall, many employers kick off their open enrollment period. This is a time when employees have the opportunity to enroll in — or make changes to — their health insurance benefits. As the open enrollment season approaches, now is an excellent time to review your current health insurance coverage, determine what benefits or funds you have left to use before the close of the coverage year, and consider your insurance needs for the upcoming year.

Basic Information Required

If you are a new benefits enrollee or if you are making changes to your medical coverage, you will need some basic information for the family members you wish to cover. You will need to have Social Security numbers and birthdates of the family members you will be covering. Additionally, if any of your family members are covered by secondary health insurance plans, you will need to have those policy numbers and the name, birth date, and Social Security number of the policyholder.

Current Providers and Medications

To accurately compare your current coverage with the insurance plans you have to choose from during open enrollment, make a list of the names of your current healthcare providers. Include doctors, specialists and hospitals or healthcare systems for each family member to see if they are included in your employer’s benefit plan network. Also, gather a list of regularly-taken medications for each family member – the name and dosage – as well as the name and address of your preferred pharmacy. Knowing your co-pays and other out-of-pocket costs will be key to determining the correct plan for you and your family.

Summary of Benefits

Review the benefit plans’ summary of benefits and comparison tables if more than one option is available to you. Be sure to compare the procedures and medications that are covered, and not covered, by each plan. Also consider each plan’s level of coverage for preventive care, such as annual physicals, mammograms and well-child visits.

Cost Comparison

Estimate how much you can afford to spend on healthcare in a year and compare the premiums, deductibles and co-pays. Then, total what you spent in the previous year on doctor visits and medicine. Remember to list annual or seasonal doctor visits and treatments for chronic conditions like asthma, as well as behavioral health costs for therapy or counseling. If your records are inaccurate, use an online healthcare cost calculator to help you estimate your spending.

Also consider co-insurance costs (for health insurance plans that have separate prescription drug plans), and your annual spending using your medical savings account (MSA) or flexible spending account (FSA). To predict your MSA/FSA spending for the coming year, total your costs for over-the-counter medications, chiropractic care, vitamins/supplements, and alternative medicines and treatments. If your unused MSA/FSA funds don’t roll over, be sure to use them before your spending deadline.

Could you use some assistance making decisions about the costs of healthcare during open enrollment season and how it can impact your other financial needs? An excellent resource is an experienced accountant like those at Donohoo Accounting Services. Schedule a free consultation at 513-528-3982 or email us today.

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7 Expenses To Include In Your Retirement Budget

The thought of retirement may seem like a long way off. On the other hand, if you’re close to retirement age, you may be wondering if you’ll have enough savings to live comfortably. The good news is that your living expenses in retirement are estimated to be 55 to to 80 percent of what they are before retiring. However, managing your money wisely in retirement will still require a budget. You can begin to outline what your retirement budget will look like by considering these seven important costs of living.


Even among retirees who down-size from single-family homes to condominiums, housing expenses will require about 25 percent of your retirement budget. Besides mortgage or rent payments, consider that you will also have property taxes, homeowners’ insurance, association (HOA) fees and private mortgage insurance (PMI) if required.

Healthcare and Insurance

The saying goes that for the first half of our lives, we spend our health to make money; and the second half of our lives we spend our money to get our health back. Consider that about 15 percent of your retirement funds will go toward health insurance premiums and healthcare costs because even those who live healthy lifestyles find they need healthcare and health insurance in retirement.


Although you may not plan to travel the world, you are likely to travel in retirement, even if just for an occasional change of scenery. Bus tours, airfare, hotel accommodations and meals out may account for about 5 percent (or $5,000 of every $100,000) of your retirement living budget.


Spending on entertainment will account for another 5 percent of your retirement budget. This may seem like a low dollar amount (about $200 per month) but remember that seniors often are eligible for discounts or free entertainment perks that they didn’t get before retirement. So, $200 a month per person should go a long way for entertainment.

Emergencies and Repairs

We don’t like to plan for them, but emergencies and repairs tend to occur at least a few times a year. Appliance replacement, automobile repairs or a leaky roof may suddenly become a priority that requires cash. Have it on-hand in retirement by budgeting at least 5 percent for emergencies and repairs.


In order to leave behind sufficient resources to your spouse, children, grandchildren or to a charity, you will need to budget for about 15 percent of your retirement income. Using the 15 percent figure, for every $100,000 you plan to leave as a legacy, you need to have about $675,000 in retirement savings.


While some states may be more tax-friendly for retirees than other states, paying taxes in retirement is inevitable. You may be required to pay taxes on retirement income such as Social Security benefits, IRA and 401k withdrawals, interest income, annuities and pension income. Some states also collect annual taxes on cars and boats. If federal, state and local taxes aren’t withheld from your retirement income sources, making quarterly tax payments may be necessary.

Could you use some assistance mapping out your retirement savings plan? An excellent resource is an experienced accountant like those at Donohoo Accounting Services. Schedule your retirement savings consultation with Donohoo by calling 513-528-3982 or email us today. And don’t forget to check us out on Facebook, Twitter or LinkedIn for our latest updates!

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Are You on Track with Your Retirement Savings?

The days go by slowly, but the years go by fast … that’s how it is with saving for retirement. While it may seem like it doesn’t matter if you begin saving “tomorrow,” one day you may be surprised to discover that years have passed. Will you have saved what you need to live comfortably in retirement? No matter which season of your life you’re currently in, you can do it! Call them targets, milestones or goals, but aiming at various levels of savings by certain points in your life is the best way to stay on track with your retirement savings.

Early Bird

The earlier you can begin saving, the better off you’ll be in the long run. Whether you begin saving for retirement in your early ’20s or a little later, the first goal to reach lies about age 30. By that time, you should have saved an amount equal to your first year’s salary. You can achieve this milestone by systematically saving 10 percent of your salary in your employer’s 401(k) or other retirement savings plan. Additionally, during this time, begin eliminating any student debt or other long-term debt you may have.

Level Up

To remain on track, when you are between the ages of 35 and 40 you should have retirement savings that total the equivalent of two times your beginning salary. It’s also an excellent idea at this point to consider ramping up your retirement savings contributions from 10 percent to 12-15 percent. Although the increase in saving doesn’t seem like much at the outset, those “little bits” will add up by the time you reach the next level of savings. If you find yourself behind and in need of catching up, consider saving additional retirement funds. Look for ways to either increase your income, reduce your expenses – or both – and save the difference.

Critical Mass

As you enter your ’50s, retirement may seem closer than ever. But don’t let that slow you down in continuing to save. The time between ages 50 and 60 are a critical time for retirement savings. By your early ’50s, amassing somewhere between four to eight times your annual salary is a great place to be (depending on your income level, lifestyle choices, budget goals and the amount of time you have left to save). Furthermore, this is also a great time to stretch your retirement savings dollars by making catch-up contributions and working as long as possible. Retiring a year or two later than you’d like can make a significant difference in your retirement income. For example, each year worked beyond age 60 means eight percent more in Social Security benefits.

Using this timeline, you can begin paving the way to retirement with more savings than you may have thought possible. Wise counsel from experienced professionals can help you map out your retirement savings plan. An excellent resource is an experienced accountant like those at Donohoo Accounting Services. Schedule your retirement savings consultation with Donohoo by calling 513-528-3982 or email us today. And don’t forget to check us out on Facebook, Twitter or LinkedIn for our latest updates!

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