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And wealthier retirees can go broke just like everyone else if theyspend more than they can afford.
This is free money.
If you are able to make additional contributions on top of this amount you should absolutely do it.
I would focus on increasing your contribution amount as your income increases rather than necessarily focusing on your age.
Having said that, once you reach age 50, you could make additional catch-up contributions.
Matching contributions are a part of your compensation package.
Ignore them at your peril.
Automate Your Savings
We all run out of self-discipline and motivation sooner or later.
Urban has seen this play out time and again.
Set up an automatic savings program for accounts outside of your employer plan.
If you never see the money hit this account, you wont miss it.
Dont wait until tomorrow or next month or next year to set up automated savings, either.
The younger you start investing, the less of your own cash you have to invest to build wealth.
Its important to remember the power of compounding.
Slash Spending in Retirement
Once you approach or reach retirement, Urban recommends playing more defensively.
Housing is, after all, the largest expense for most households.
It offers the greatest room for saving money.
Strategic tax planning is a key component of effective retirement planning.
Healthcare goes beyond medical insurance such as Medicare, however.
What makes retirement planning so tricky is its unpredictability.
And those 40 years could be in good health withminimal extra expensesor in bad health with expensive care.
Think long-term to prepare for a low-risk, rewarding retirement.
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