If you’re in your 50s or 60s and feeling you’re behind in saving for your retirement — or you haven’t saved anything at all — you are not alone. Rising costs in every day living expenses, debt, and a lack of sound financial planning leave many people feeling like they may never catch up.
It may not be easy to catch up on retirement savings, but it’s not a lost cause. Here are five steps you can take today to help bring you closer to a comfortable retirement:
Many folks get off track simply because their monthly expenses exceed their income or leave them too little money to adequately fund their retirement. While it may be painful to cut back on expenses and change your lifestyle, this is the most important step you can take today to get back on track.
Many people in their 50s and 60s are “empty nesters,” with kids in or through college and often more room than they actually need. In fact, downsizing is a common move when nearing retirement. Selling a home and moving into a smaller one can help shed costs like maintenance and upkeep. Moving from a three- or four-bedroom home to a two-bedroom condo could provide upwards of $100,000 that could be put into an investment fund.*
If you are underwater on your home—owing more on it than its market value—and hesitant to sell, another option is to share housing expenses with extended family members or close friends.
As painful as it might be, a second job is a good way to instantly boost the amount of money you are putting toward retirement. Even a part-time job that pays a few thousand dollars a year may help. Again, every bit counts.
Most retirees are happy to be freed from the daily grind, but many also find that they need things to keep them occupied. If you started saving late, one thing to do is figure out how you can create extra income in retirement by doing something you enjoy. There are many opportunities:
Working during retirement or retiring later will also allow your assets to potentially grow larger, increase your eventual Social Security payments and shorten the time your retirement funds will need to last.
Life insurance and long-term care insurance might seem like extra or even potentially unaffordable expenses, but failing to purchase these policies (for yourself or loved ones) can easily cause a retirement shortfall for you or your beneficiaries. An unexpected illness or death can destroy even the best retirement savings plan. Nursing homes can run thousands of dollars a month and some illnesses can result in costs into the hundreds of thousands. If you are saving late, it is vitally important that you examine these options so an unforeseen circumstance doesn’t drain the funds you have.
Considering the rapid pace of medical advances, those that started saving late will likely need to retire later. It is a harsh realization for most, but it is always better to understand early that you may need to work longer to meet your retirement floor than it is to run out of funds later in life when working is no longer an option.
Finally, to help ensure you get on track and stay on track with your retirement plan, seek the advice of a financial advisor.
*Speak with a real estate broker and lenders to determine as many costs as you can.
The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons.
TIAA-CREF Individual & Institutional Services, LLC, member FINRA, distributes securities products
Please note that investing involves risk, and past performance is not indicative of future results.
A TIAA-CREF brokerage account offers thousands of investment options.