For retirement income purposes, it might be a good idea to figure out how much you and your partner will need assuming you live to age 90.  How does this compare to the expected annual income from all your retirement plans?  Don't forget to add inflation, both to your Social Security benefits and to the cost of living.

What to do if you’re late starting to save for retirement: follow these steps

  • If you’re in your 40s or 50s and haven’t saved a dime for your retirement, don’t panic.
  • There’s still time to build a little nest egg, but you have to hurry and be realistic, experts say.
  • First you need to take a look at what you have and what you need, create a plan and stick to it.

“Better late than never” applies to many things in life, including and perhaps especially saving for retirement.

Even if you’re halfway through retirement and haven’t started saving yet, there are steps you can take to make up for lost time so you can comfortably live out your golden years.

Among non-retired adults in 2021, a quarter had no retirement savings, according to the Federal Reserve. So you’re not the only one who hasn’t started saving and there’s no need to panic, advisers say.

“It’s out of the question to not be homeless if you do something right away, but you have to be realistic,” said Brian Severin, senior executive vice president of Mutual of America Financial Group. “The biggest takeaway is to set realistic expectations. Probably, if you’re 55 and in debt and haven’t saved, you’re not going to spend your retirement traveling the world.

Since you’re starting later, consider pushing your retirement date later to give yourself more time to build your nest egg.

“While waiting until you’re 70 to file, you can also maximize your (Social Security) benefits,” said Dan Simon, retirement planning consultant at Daniel A. White & Associates. “Consider a hybrid retirement to do this – part-time work after retiring from your main job.”

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How do you start saving for retirement?

First, create a workable plan and it will keep you off work at some point, advisers say.

You can try to figure it out on your own, but coming up with a plan can be tricky. You need to account for taxes, and what types and combinations of investments will maximize your returns, and Social Security, if you are eligible. If you decide to hire a professional, hire a fiduciary who is legally bound to work in your best interests. Also, be sure to check consulting fees and compensation to keep your costs low.

Either way, you’ll have to “work back to see what the gap is to what you’ll need to provide a certain standard of living,” Severin said.

To do this, first determine how much you will need each year to live a comfortable, if not extravagant life, and take inventory of what you already have such as a house, a life insurance policy, money in the bank or any savings bonds you may have. have forgotten.

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Then calculate how much you need to save by retirement to reach that annual goal. Also, assume you will live a long time. Thanks to advances in medicine and technology and better nutrition, people are generally living longer.

“Ninety (years) covers the vast majority of people,” said Rob Burnette, managing director, financial adviser and professional tax preparer at Outlook Financial Center in Troy, Ohio.

Once you know all of this, you can start taking the steps necessary to make it happen.

For retirement income purposes, it might be a good idea to figure out how much you and your partner will need assuming you live to age 90.  How does this compare to the expected annual income from all your retirement plans?  Don't forget to add inflation, both to your Social Security benefits and to the cost of living.

What steps can I take to save for my retirement?

  • Reduce your expenses to free up cash. You can make small changes like eating less, buying more sale items, driving less, taking more vacations, or downsizing your home. But don’t worry if you still enjoy hanging out with friends or buying coffee several times a week. “I have no problem with that,” Burnette said. “We are still social beings and we cannot live like a hermit now in the hope of not living like a hermit later.”
  • Pay off the debt. “Generally, you should pay off high-interest debt,” Severin said. “You’re unlikely to pay off a house, but you can pay off credit card debt. Do it first.
  • Take advantage of your 401(k). If you are working and your company has a 401(k), start contributing at least enough to get the company match.
  • If you’re comfortable, increase the risk to make up for lost time. This could mean having more stocks than fixed income assets like bonds in your wallet. But with the markets so volatile and the economy so uncertain lately, it’s not worth investing in riskier assets if you can’t handle the roller coaster, Burnette said. Instead, find ways to generate money. When stocks seem to have bottomed out and are less volatile, you can use the money you have accumulated to buy stocks at that time. “Stocks can go up very quickly, and that can amplify your returns,” he said. “Taking high risk does not necessarily mean high return. It can go the other way. »
  • Consider investing with a fund manager. They often have access to investment products that the average investor does not. For example, Burnette says it can buy clients one-year certificates of deposit bearing interest at 11%, more than double what is currently available. “We have access to the institutional CD market”, said Burnette. “These aren’t CDs you get walking into the bank around the corner.”

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If you follow these guidelines, advisors say you can still manage to retire comfortably. But the key is to do it immediately to try to save enough to maintain 100% of your pre-retirement income or as close to it as possible for each year you stop working, Burnette said.

“If you want a big shade tree, the best time to plant it was 20 years ago,” Burnett said. “The next best time is today.”

Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at and sign up for our free Daily Money newsletter for personal finance tips and business news Monday through Friday mornings.

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