Stop Procrastinating and Retire Richer: 3 Tips to Act on Now

After a great 2013, smart investors are giving serious thought to how they can keep the gains going in 2014 and beyond. If you don't procrastinate, you can jump-start your investing and take maximum advantage of the financial resources at your disposal.

Here's how to put time on your side and reap big rewards in the years to come.

Make Your 2014 IRA Contribution Now

Most people understand that contributing to a retirement account is a great way to save for your golden years. Taking advantage of benefits like tax-deferred growth can help your savings grow a lot faster and get upfront tax breaks to boot.

When it comes to actually putting money into IRAs and other retirement accounts, though, many people fail to follow through. Luckily, the tax laws give you until mid-April of the following year to make contributions to an IRA. So if you haven't yet made a 2013 IRA contribution, you still have more than three months to gather money together and get it into your retirement account and enjoy the tax benefits immediately.

Still, rather than waiting until the last moment to contribute to an IRA, the smart thing to do is to start thinking about your earliest opportunity to get money into a tax-favored retirement account. Doing so can add thousands to your eventual retirement nest egg. That's why making your 2014 IRA contribution now could be the best money move you'll make all year.

Put Your Money in Play

Over the long haul, stocks have gone up more often than they've gone down. That means that most of the time, the longer you wait before you make an investment, the more you give up in lost gains.

That's been especially true in 2013, as you can see from what would have happened if had invested in the following stocks or exchange-traded funds at the beginning of 2013:
Stock/ETF $5,000 Invested on Jan. 2, 2013 Is Now Worth:
Tesla Motors (TSLA) $21,300
Netflix (NFLX) $19,700
Best Buy (BBY) $17,000
Delta Air Lines (DAL) $11,100
SPDR S&P 500 $6,400

The dollar figures above show what investments in each of these made at the beginning of 2013 would be worth today for those who got their IRA contributions in at the first possible moment. Admittedly, the individual stocks listed above are among the best performers in the market during 2013, but even a plain-vanilla index-tracking fund like the SPDR S&P 500 gave investors an almost 30 percent bump over those who are just now getting around to making their IRA contributions.

The Early Bird Avoids Complications

Great returns aren't the only reason to work fast in getting your retirement contributions made early in the year. Waiting until the last possible moment often causes complications with your financial institution, as IRA providers can get bogged down in the last-minute rush and make mistakes that could jeopardize your ability to make retirement contributions for a given year at all. If you make your IRA contributions early, there's plenty of time to iron out any wrinkles that may arise.

Moreover, most people find it difficult to come up with $5,000 to invest in one fell swoop, which sometimes leaves procrastinators contributing less than the maximum amount. Getting started earlier lets you contribute more manageable sums at regular intervals throughout the year.

Setting up a retirement account is easy, and so there's really no good excuse for waiting any longer than you have to before contributing. By saving for retirement right after the year begins, you'll ensure that you'll get 2014 off to a great start for your finances.

You can follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger or on Google+. He doesn't own any of the stocks mentioned in this article. The Motley Fool recommends Netflix and Tesla Motors. The Motley Fool owns shares of Netflix and Tesla Motors.

Increase your money and finance knowledge from home

How Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »

Intro to different retirement accounts

What does it mean to have a 401(k)? IRA?

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

It is definitely a better idea to get started sooner rather than later, but even if you do get a late start, you can get where you need to be. Learn about making a plan you can stick to at There are lots of options to consider, and you should research them all before getting involved. Maybe some would work for you that wouldn't work for someone else.

April 24 2014 at 1:13 AM Report abuse rate up rate down Reply

I like how he says \"you have more than three months to gather money together\". What if a person has no money to \"gather\"? I mean nothing, nada, zip. Living paycheck-to-paycheck!

January 02 2014 at 10:18 PM Report abuse rate up rate down Reply

If you are ready to retire or close to it. Take a serious look areas of the country that dont drain you of your income. A good example is living in SC just south of Charlotte. Our property taxes went from 13000 to 1300. Great medical, climate and loaded with people who got smart and left NY expecially Long Island. A heard of elephants couldnt drag me back there.

January 02 2014 at 10:20 AM Report abuse rate up rate down Reply

Retirement richer isn't rocket science
1. You cannot go into retirement with a mortgage, sell and downsize if you have to
2. Live below your means, invest in funds, index, or ETF. Most don't have the brains to trade.
3. You will spend about the same in retirement as you do now, 80% is a myth for most people
4. Planning to work part time in retirement is fine, if and only if, you have a skill in demand.
5. Total up your pensions, social security and see how much you will have to withdraw each year on top of that money. If the amount is more than 3% you have a problem and better not counting on retirement until you get the amount to that level.
6. If you spent all you made along the way, well, plan to work until you about croak or win the lottery.

January 01 2014 at 10:42 PM Report abuse rate up rate down Reply
1 reply to jhrooney's comment

Well said

January 02 2014 at 10:16 AM Report abuse rate up rate down Reply

The key is to start planning early and be consistent in saving/investing, take advantage of any employer matching plan, max out contributions when possible, avoid unnecessary risks with your nest egg and plan for multiple streams of income once retired (social security, pensions, dividends, part time work, etc.). I have been planning for years and use the retirement information available on the web. Recently I came across the site Retirement And Good Living that provides information on finances, health, retirement locations, part time work and also has a great blog of guest posts about a variety of retirement topics. Very useful site.

January 01 2014 at 1:46 PM Report abuse rate up rate down Reply

Put everything on 00; bet the farm; go for broke.

January 01 2014 at 12:16 PM Report abuse +1 rate up rate down Reply
Robert & Lisa

We didn't see the three tips touted in the headline.

January 01 2014 at 7:51 AM Report abuse rate up rate down Reply
Robert & Lisa

These experts have been wrong time and again. 8 years ago, we went against the experts and put our IRAs in a guarenteed minimum 6% investment. Now they are trying to buy us out. Don't know when it will happen, but eventually, the dollar is going to fall like a rock. Just a word to the wise.

January 01 2014 at 7:48 AM Report abuse +1 rate up rate down Reply
2 replies to Robert & Lisa's comment

Yep, and my best investments, that can support our retirement 2X over alone, were ALL outside of Wall Street.

January 01 2014 at 2:09 PM Report abuse rate up rate down Reply

What kind of investment was it?

January 02 2014 at 5:21 AM Report abuse rate up rate down Reply
1 reply to badtothebone9669's comment

Student rental properties is the largest part, Been building it up for 13 years on the weekends/holidays. I have work about 10hrs/week at it, but clears about $100K/yr ,and growing every year (should be about $130K in 2 more years and over $150K in 5 years) and they just kept going up in value, even right thru this recent RE downturn. A very small silent partnership in a Surgical Center (33% ROI, dividend check), Sell of a small, 5% owner,ship of the construction company I retired from (not sure if that will pay all that well, took a HUGE hit the last few years, 80% layoff, etc). Never invest in a construction company- a broken business model. And as a fun hobby dismantling old Triumph cars and selling the used parts, every now and then, buy a car for $1,500, sell the parts for $4-5K (actual pay per hour is not all that high, but is fun meeting fellow Triumph idiots). Sure clicking a mouse to make a transaction on Wall Street is easier, but you have no real control, you get second hand info (of which a lot of it is not really the truth), a fair amount of thieves live there, etc. I still have $$ (IRAs, 401K, , etc) in Wall Street, but if it all disappeared tomorrow, I would still be fine, thanks to the other stuff.

January 02 2014 at 8:59 PM Report abuse rate up rate down