Turning 50 With No Retirement Savings? Here Are Five Ways to Catch Up

It’s ideal to begin setting money aside for retirement as early as possible, even if the end of your career is far off. Still, if you’ve reached 50 and haven’t built up savings, there is time to start putting money toward your future.

Below are five steps that can help move you and your finances closer to a more comfortable retirement.

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1. Take stock of your finances

Start by reviewing your full financial picture. Look at your income, monthly bills, debt, workplace retirement contributions and the amount you expect from Social Security. It also helps to think ahead about expenses that may rise later in life, such as health care costs or the need for long-term care.

If possible, estimate how many more years you want to keep working, since that will shape how aggressively you need to save.

2. Boost your savings rate

Next, try to increase how much you’re setting aside. If your employer offers a retirement plan, such as a 401(k), and matches part of your contributions, make sure you contribute enough to capture that match. You can also save separately in an individual retirement account, or IRA. Fidelity Investments recommends having eight times your income saved by age 60, which may require maximizing your retirement contributions. Once you turn 50, the IRS allows catch-up contributions, letting you put more into tax-advantaged retirement accounts than younger savers can.

As you invest, avoid taking unnecessary risks or chasing speculation. Younger workers often have more time to recover from market downturns, but older savers generally need a more balanced and diversified portfolio.

3. Cut back on spending

Reducing expenses can help you free up more money for savings.

That may start with small changes, such as skipping daily coffee or canceling subscriptions you no longer use. But the biggest savings often come from focusing on housing, transportation and high-interest debt, including credit card balances.

4. Plan your Social Security timing

You can begin claiming Social Security at 62, but waiting longer can increase your monthly benefit. Delaying until 70 results in the maximum benefit, which can provide a stronger income stream later on.

Some retirees rely on savings first so they can postpone taking Social Security. Others coordinate with a spouse so that the higher earner waits longer while the other spouse starts benefits sooner.

5. Think about working longer

Retirement does not have to mean never earning another paycheck. Some people who leave full-time work in their 60s still take on part-time jobs or side gigs for extra income.

If you can delay retirement for several more years, you may have a better chance of building the retirement you want.