Even before economic uncertainty struck, lack of retirement savings was an issue for many Americans. In a study conducted by the Insured Retirement Institute, researchers found that only 54% of baby boomers have retirement savings. Lack of retirement savings is, understandably, a major source of stress. You may feel like there’s no way to get caught up, so why bother trying. Fortunately, though, there are some ways to build a sizable nest egg after you’ve reached fifty.
Whether you have less in your retirement savings than you need or simply want to save a little extra as you approach retirement, it isn’t too late to save. If the thought of tackling a series of big savings goals intimidates you, try a different tactic! For example, it isn’t necessary to eliminate all of your debt before starting to save. Instead, start thinking about ways to accomplish both goals at once. Here are 8 steps to take to if you’re a retirement late-starter.
Focus on the future, not the past.
You might find yourself wishing you had started saving for retirement earlier. However, this isn’t a productive mindset, and it will only make you feel guilty. Turn your focus toward the future instead. Though positive thinking might not help as much as you want it to, dwelling on the past can exacerbate your fear. It’s important to remember that any savings is better than nothing. Starting late is better than never starting at all! Don’t spend too much time considering would-haves and should-haves; these won’t help you move forward.
Avoid retirement calculators until later.
Stay away from calculators if you haven’t saved for retirement by age 50. If you’re behind, savings calculators can reinforce just how behind you are and leave you paralyzed by anxiety.
So leave the calculators for now and focus on your own budget. If you don’t already have a budget, now is a good time to make one. Once you have a handle on your monthly expenses you can figure out where you’re overspending and where to cut back.
Maximize your contributions.
The best way to quickly add to your retirement savings isn’t just by throwing money into an account. Instead, explore your options. Consider making use of “catch-up” rules. These allow people 50 and older to put an extra $1,000 into their IRAs and an extra $6,000 into their employer-sponsored retirement plans each year.
At the same time, you might want to look into downsizing your home. This might reduce or eliminate your mortgage payment. Add automatic investment deposits and now you’re saving without even having to think about it. Combining a couple or all of these strategies will have a greater impact than simply adding to savings alone.
Reconsider your retirement plans.
Though early retirement gives you lots of free time, there are also benefits to working past the common retirement age of 65. Many people find that they enjoy better health longer and are able to work longer. Additionally, people who work longer and remain social tend to live longer.
There are other benefits of working until you’re older, too. You more time to put money into an employer-sponsored retirement plan or IRA. You’ll also get more Social Security benefits than you would if you claimed in your early to mid 60s. You might even get better pension benefits. Delaying retirement account withdrawals also results in payoffs.
Enter the digital age.
Make use of apps such as Digit, Qapital, Acorns, and Stash to increase your automated savings.
Generate income beyond your investments.
One of the benefits of growing older is that you become more experienced in your field. If you have years of experience in your career, make sure you’re earning your worth. Workers in their fifties are typically in their peak earning years thanks to a long career of experience. If you’re not earning your worth, ask for a raise.
Additionally, consider a part-time job to generate more income. If you have a special or unique skill, consider starting a side business at home. An experienced CPA can also show you ways your side business can reduce your taxes.
Selling those unused items taking up space in your attic or basement is another way to earn money beyond your career and investments.
Expect the unexpected.
Unexpected events can sabotage your retirement savings. You may want to consider purchasing long-term care or disability insurance to cover any unexpected costs that crop up.
Finally, revisit the retirement calculator.
Once you rework your retirement plan and adjust where and how you’re going to save money, it’s time to use a retirement calculator. These help you gauge where your savings are at. Choosetosave.org’s Ballpark E$timate is a reliable retirement calculator.