How to Save for Retirement Later in Life

Ideally, you would have saved up a large portion of your retirement savings throughout your adult life.


However, not everything in life goes as planned, and there may be many reasons for why you are just getting started building up your retirement later on in life. While it is certainly more stressful and may put more of a financial strain on you to get your retirement savings built up as you near retirement age, it can be done.

If you are in your 50s and do not have a decent retirement savings account, you do not need to panic. However, you will need to work very hard in the time you have before you retire in order to build your savings successfully. Thankfully, there are many strategies that may be helpful for catching up on your retirement savings in order to make up for lost time. The sections below offer some helpful strategies and tips for how to save for retirement later in life.

Catch-up Contributions

If you are using an employer-sponsored 401(k) account or an IRA, one very smart way to accelerate your savings is to take advantage of catch-up contributions. Catch-up contributions allow you to contribute more funds than you are typically allowed to contribute each year starting as soon as you turn 50 years of age. In 2018, the contribution limit for a 401(k) is $18,500, and you are allowed to contribute an additional catch-up contribution of $6,000, making your new total yearly limit $24,500.

IRAs also allow catch-up amounts to both traditional and Roth IRAs in the amount of $1,000 in 2015 to 2018 if you are older than 50 years of age. Other retirement accounts such as a 403(b) will allow certain employees with at least 15 years of service to contribute even more than the catch-up amount if eligible.

You should note that each year the contribution limits are subject to change, therefore it is always important to research what the current requirements and catch-up contribution limits are so that you can make the most of your contributions.

Delay Retirement

You may also consider delaying retirement slightly by even working just part-time for a few years after you have reached retirement age. Or, you could consider a slight career change into something like teaching or consulting if you are qualified enough. Extending your working years can help you greatly by cutting down on the amount of time you are in retirement, which will also allow your savings to grow more. It also would provide you with a few more years so that you could continue contributing to your retirement.

This option can also be beneficial if you are able to use more of your income to save a large portion for your retirement. However, working for a few years later than you planned may not be a possibility. Most people end up leaving the workforce earlier than initially planned for a number of reasons, including health issues, needing to care for a relative or company downsizing. In spite of this, you can still keep working a few years longer in mind as a possible option.

Avoid High Risks

While investing into riskier stocks in the stock exchange can be a good option for potentially building up your savings, it is only advisable if you have many years before you reach retirement. The closer you get to retirement age, the less risky your investments should be so that you are not potentially losing the money you may need to survive in the next few years. If you are in your 50s, it is not necessarily a smart idea to get started with day trading or risky investment options; playing it safer will likely play out much better in your favor.

Keep Investing

Instead of keeping a lot of cash on hand, it is better to have that money potentially grow through investment. However, as mentioned in the tip above, you should certainly play it safer as you near retirement in order to keep your money more secure. It is recommended that you place your money into a mix of stocks and bonds, and that you create a portfolio that is as balanced as possible. Doing so can help protect against big stock market fluctuations and help you to yield a good return.


You may also want to consider speaking to a professional about your stock trading options and the best way to get your portfolio set up. If you are new to investing and the stock market, the entire process can be very confusing. The money you are investing is extremely important as it is the money that you will use to survive in the next few years, so it is crucial that it is invested very wisely.

Adjust Your Lifestyle

Are there ways that you can adjust your lifestyle in order to put away a little extra money here and there? One example of a big change is to consider downsizing your home. If you are like most people, housing costs take up the largest portion of your income. If it is possible for you to move into a smaller or more reasonably priced home, you could potentially add thousands of dollars to your retirement fund. Plus, you may find that a smaller home helps you to save on other expenses as well, and you may be able to find a residence with less maintenance. Even moving to a different area can help you to save a large amount of money if the cost of living is cheaper, so you may want to consider researching the different areas you would be interested in moving to.

Smaller adjustments such as creating a tighter budget and cutting back on certain activities can also help you to save extra money. Ultimately, you will want to push yourself to put as much money into your savings and retirement accounts as possible, so look for wherever you can cut back in order to save more. Having enough money for a comfortable retirement is very important, and as you near retirement age saving money becomes a much higher priority, so you should certainly look into the various ways that you can put more money aside.


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