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Retirement Strategies for Late Savers

Don’t let a late start stop your retirement planning.

mature couple discussing finances

Sometimes life's circumstances get in the way of retirement saving. Things like buying your first house, paying for a child's education, a medical emergency or the loss of a job.

Even though you're getting a later start, don't be discouraged; saving for retirement is still possible. It may be a little more difficult, but all it takes is commitment and a willingness to save.

Here are some tips on starting a retirement plan at a later age.

Set Goals

Determine how much money you'll need to maintain your standard of living in retirement. Online calculators can help you figure out how much you need to save each year to reach your financial goals.

Know What You Already Have

Calculate what you already have from healthcare, pensions and social security from current and former jobs. This will give you an idea of how much you need to make up.

For example: If you need $7,000 every month and Social Security and pensions add up to $4,000, you know you need to have a savings plan that will pay the difference. The Social Security Administration offers detailed information to help you determine your retirement benefits and other beneficial programs offered under current law.

Make a Plan

Once you know how much you need to save, make a budget that allows you to set that amount aside.

Get Started

The sooner you start, the more time your money will have to grow.

Join an Employer Saving Plan

If your employer has a voluntary contribution retirement plan, sign up today, and contribute the maximum allowed by law. If your employer matches a percentage of your contribution, that's free money you should never pass up. Depending upon the plan, there may be tax advantages.

Save Independently

In addition to a pension or employer's saving plan, establish your own Individual Retirement Account (IRA). You can put up to $5,000 a year into an IRA – more if you are 50 or older. (Note: There are two IRA options – a traditional and a Roth IRA. There are favorable tax treatments of your contributions and withdrawals depending on which option you select.)

College vs. Retirement Saving

As a parent, you want to take care of your kids, but financial advisers agree that retirement saving should be a higher priority. College can be paid for with grants, loans and part-time jobs. There aren’t scholarships for retirement.

Play Catch-up

Tax laws allow those over 50 to contribute a little extra to 401(k)-type retirement plans and IRAs, so you can do a little catching up near retirement age. Take advantage of this if you're over 50.


If your kids have left the nest and you're still living in a big house that has appreciated in value, consider selling it and buying a smaller, less expensive home. You'll not only save on your mortgage payment, but also in lower costs of heating, cooling, insuring and property taxes. Put the savings away for retirement.

Second Job

Consider getting a second job and saving your earnings for retirement.

Get Out of Debt

If you carry thousands of dollars of credit card balances and only make the minimum payment each month, potential retirement savings is going directly to your credit card company in the form of interest.

The bottom line is that even though you're starting late in terms of retirement planning, it can be done. It just may take a little more effort and self-sacrifice.

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