If you’ve reached fifty and have been unable to save much for retirement, you may be concerned about how you will support yourself after leaving the workforce. Rest assured that no matter your age, saving is never too late. It might not be possible to change the past or how much you have managed to put away for retirement. Nonetheless, you can always start saving for the future.
If we lived in a perfect world, everyone would begin saving for retirement right from their first paychecks. But for many, starting late is something we can’t avoid. Thankfully, it’s never too late to get back on track and develop a solid plan for your finances and future.
Here are the best tips to start saving for retirement at fifty years old:
Review Your Budget
Look for opportunities in your budget to make changes. You may have numerous streaming or magazine subscriptions, for example. Cancelling all but one could add up to a reasonable amount each month. Your food budget may be another place that could stand a trim. If you tend to eat out a lot, really make an effort to eat at home.
You could save a significant amount of money. These cuts may mean you need to adjust your lifestyle, but in the long run, it will pay off, and you’ll be glad you made the sacrifices. Any unnecessary spending that can be moved into retirement savings will grow from compound interest over time.
Work with a Professional
Investing is a great way to build your retirement savings, especially in your fifties. A financial advisor can suggest better ways to manage your income and investments. Look for an advisor that specializes in retirement planning. A professional can show you the options available and help you devise a step-by-step plan to reach your retirement goals.
Some advisors charge a fee, and others will take a commission from any products they recommend to you. Finding an advisor you trust will also serve you through your retirement years; managing your finances after retirement can be complicated.
Reduce or Eliminate Debt
It may seem impossible to save for retirement if you are paying down debt, but you must do. Make a list of your debts and the associated interest rates. Debts with the highest amount of interest should be your priority when tackling the list.
Continue to pay the monthly minimum on all of the other debts. When the first debt has been paid off, move on to the next. Once you have paid off all the debts, you can funnel the money you were allocating to repayment into a retirement fund.
Set Up Automatic Savings
Calculate a realistic weekly savings goal and set up an automatic transfer into the appropriate accounts. You can set aside a little bit of money weekly, biweekly, or monthly with automatic bank withdrawals. It doesn’t matter if that amount is twenty dollars or two hundred; the important part is to save regularly.
You’ll be surprised to see how even a little bit of money set aside can grow, helping you see your dreams become a reality.
Max Out Contributions
If you have a retirement savings plan at work, now is the time to ensure you are taking full advantage of it. Contribute each week enough to get the full match offered by your employer. And it never hurts to ask if they have additional retirement savings plans.
Not only are workplace retirement plans an easy and automatic way to invest in your future, but you won’t have to pay taxes on that income until you withdraw it after you retire.
New Sources of Income
It’s no secret that your income is key when it comes to how much you can save each month, and let’s face it; you can only cut so much from your budget. Whether it’s delivering for Instacart or selling your creations on Etsy, there are hundreds of things that you can do to make a little extra money on the side.
Other income-boosting strategies include: selling any belongings you no longer need, renting out that spare room, teaching a course in an area you are skilled in, starting a blog or asking for a raise.
Delay Retirement a Few Years
This may not be what anyone wants to hear, but if you are just starting out saving for your retirement in your fifties, it’s a valid option you need to consider. An extra five years in the workforce can significantly affect your finances.
If you are in good health and enjoy your job, putting off your retirement for a few years may just be the thing to put you in a better position financially. Every additional year you can earn an income and add to your savings is one less year your retirement funds need to support you.
