Behind On Retirement Savings? Here’s 7 Steps To Catch Up

Jar with cash for those behind on retirement savings

If you’re behind on retirement savings, there’s still hope

Is your retirement a little too close for comfort?

Maybe those wild and carefree days of your youth lasted a tad longer than they should have.

Or maybe you got a late start in your career because you couldn’t figure out what you wanted to do for the rest of your life.

Perhaps life kept throwing you one curveball after another and you could barely catch your breath.

Any of these situations would cause a delay in planning and saving for retirement.  In fact, these are only a few circumstances that have caused many older American adults to fall behind on their retirement savings.

According to the 2020 Report on the Economic Well-Being of U.S. Households, 17% of those surveyed between ages 45 and 59 had no retirement savings, and 56% felt they were behind on their retirement savings.

Whatever your circumstances (or age), if you’re behind on retirement savings, it’s not too late to get on track – but, you have to start now!

There’s nothing you can do about your past financial mistakes, but you *can* choose to make better decisions for your future.  If you’re willing to buckle down, be flexible, and make some sacrifices, you can still have a comfortable retirement.

If you’re worried about your financial future in retirement, it’s time to create a plan and take action.

Here are 7 steps you can take if you’re behind on retirement savings and need to catch up.

Want to learn even more ways to save money? Download this free 50 Tips to Save More Money checklist!


STEP 1:  Create a retirement plan

Couple discussing retirement planning on beach

If you don’t know where you’re going, you’re never going to get there.  Putting a plan in place will give you goals to work toward, a roadmap to follow, and hope for your future.

Have a conversation with your spouse or partner about what you’d both like retirement to look like.  Find out what you both want, as well as the unique ideas you each have.

Spend some time dreaming together.  Don’t worry about your lack of savings right now.  Just write it all down without judgment.

Crunch some numbers and determine what a retirement budget would look like.  Prioritize expenses by what you value the most.  If your ideal retirement requires more than you’re willing (or able) to save, start cutting it down.

Figure out the annual retirement income you’ll need to generate from savings to sustain the lifestyle you want.  Again, don’t worry about how you’ll get there right now.  You can always adjust your plan.  Right now, you just need a direction.

Many financial planners advise a savings goal that will provide 70 – 90% of your annual pre-retirement income.  So, if you currently make $60k/year, then you should be able to cover all of your retirement expenses on $48k/year (80%).

Once you have a target number, you can start the planning phase.  You can work backwards to figure out how much you’ll need to start saving.

Use a retirement calculator to get a good idea, but also consider talking to a personal finance expert that will help you stay on the right track.  You’ll want to consider details such as social security benefits, inflation, rate of return, taxes, and healthcare expenses.

Finally, keep your plan somewhere visible and accessible.  You’ll want to look at it frequently to keep you focused and on track.

Create a vision board or savings tracker as reminders of your goals and your progress. Put up pictures that will remind you what you’re working towards.  Start getting excited about how fun and exciting retirement is going to be!

Don’t discount how important it is to dream about your future.  That’s where it all begins.

STEP 2:  Increase your income

This is the age of the side hustle.

Woman tutoring young girl

There’s never been a better time to turn your passion into profit, create passive income streams, or find a second job that’s as flexible as you need.

From freelance writing to dog walking to driving a car to being a landlord – there is a multitude of possibilities to increase your income.

If you feel a little overwhelmed just thinking about adding something else to your already packed schedule, consider starting small.

Maybe you can tutor students for a couple hours a week.  Or offer dog walking on the weekends.  Submit one article a month as a freelance writer.

Your side hustle doesn’t need to take up a lot of time, it doesn’t need to generate a ton of money, and it most certainly doesn’t need to take up all of your free time.

Just start where you are, explore your options, take it slow, and see where it takes you.

Who knows, it may turn into a significant source of income that you can draw from well into your retirement years!

STEP 3:  Make sacrifices to save more

Older couple moving boxes

If you have a roof over your head, food on the table, and a job to pay for them both, you’ve probably got all your needs met.

Sometimes it’s hard to come to terms with the difference between what is necessary and what isn’t.  After all, if we admit that we really don’t *need* that new boat parked out in the driveway, we may let conviction’s foot squeeze through the door.

And, sometimes conviction can be inconvenient.

However, if you’re behind on your retirement savings, maybe a little guilt is helpful.  As long as feelings of irresponsibility are moving you toward better choices, I say let ’em loose!

Maybe you need to take a long, deep look into the eyes of indulgence and determine if you need to keep that relationship active.  It’s quite possible a breakup would be the best thing for your future.

This could look like selling that brand new car you just bought that came attached to a 5-year loan.

Or telling your aesthetician that you’ll need to forego those European facials for a while.

Perhaps you need to learn how to prepare freezer meals so you have no excuse to eat out.

You could choose a road trip to the beach instead of a 10-day cruise to the Bahamas.

You could even decide to sell that 5-bedroom home on the 1/2 acre lot for a 2-bedroom condo with no yard.

The point is, you’ll need to decide for yourself what you’re willing to give up in order to have a more secure retirement.  The choices you make today – good or bad – will affect your standard of living when you’re older.

So, decide what you’re willing to sacrifice today to help you catch up on your savings for the future.

And if you do it right, those sacrifices will only be temporary.

STEP 4:  Pay off your debt ASAP

The more you have to pay towards debt, the less you have to add to savings.

Woman paying debt

Like Dave Ramsey says, you need to stop paying the other guys and start paying yourself.  It’s the only way you’ll increase your wealth.

If you have credit card debt, make a promise to yourself and your spouse that you’re not going to charge anymore.  Then do what’s necessary to get them paid off as soon as you can.

Same goes with personal loans, student loans, car loans, and any other loans you can think of.

Stop borrowing money, and then put every cent you can spare towards paying off the debt you have.

Then, when your debt is paid off, you’ll have that much more to put into your retirement accounts.

Even try to eliminate your mortgage.  This may seem impossible for some, but that’s only because there are certain options you haven’t considered – like, actually selling your home and moving into something cheaper.

You need to figure out what your priorities are, but don’t let debt keep you from saving for your future.

Do whatever you can to wipe it out as soon as possible!

STEP 5:  Put your retirement before your kids

College cap with tassle

This one might be tough for you.  I know it is for me.

As parents, we feel responsible for taking care of our kids.  Paying for their college, helping them with their bills, pitching in for their first car.

However, if you’re honest with yourself, you might realize that if you take on your kids’ financial responsibilities, you won’t have enough for your own.

The best thing you can do for your kids is teach them to be financially independent.  Show them how to make a budget and stick to it, encourage them to make wise choices, and discourage them from acquiring debt.

I wrote a post about 9 reasons why you shouldn’t be paying for your kids’ college education, but if you feel you can swing it for your kids and still meet your retirement goals, then you might want to implement a cutoff year for college funds.  This will help you stay on track with your financial goals without getting derailed with tuition payments long past the planned time.

Finally, resist bailing them out of their own financial mistakes.  Which they will make them, for sure.  This is all a part of learning wise financial management, and it’s the mistakes that give the best and most memorable lessons.  Don’t stunt their growth by rushing in to save the day.  Believe me, I know from experience, this only prolongs the bad habits.

Also, don’t forget to explain to your children why you need to put your own finances first.  One reason is so that you don’t run out of money during retirement, but another is so you won’t be a burden to them in your golden years.

STEP 6:  Educate yourself

When you live in denial, you fail to acknowledge the importance of your choices today and how they affect all of your tomorrows.

Woman reading about personal finance

The good news is, it’s never too late.  You can start now to educate yourself towards smarter financial outcomes.

Here are just a few topics you can learn more about to strengthen your retirement planning skills:

  • how different retirement accounts work
  • the ins and outs of personal investing and strategies to follow
  • the smart way to draw from social security
  • making decisions now that will lower your tax bill in retirement
  • learning to develop a growth mindset about money
  • how to create financial goals and stick to them

The mindset is just as important (if not more so) than the management.  If you choose to get more educated about personal finance, either through books, podcasts, videos, courses, etc., make sure you don’t just focus on the numbers.

Knowing how to change your behavior is not a math problem, it’s a mindset issue.

STEP 7:  Delay retirement

Older career woman

A sure way you can catch up on your retirement savings is to simply continue working after the typical retirement age.

This will allow you to add more money to your savings, as well as reduce the time you’ll be living solely off your retirement accounts.  With each year that you continue to work, your money has more time to grow.

This may not be ideal, but you can make it more appealing by choosing to work somewhere you actually enjoy spending time.  Nobody said you have to keep working at the same company you’ve been with for 20 years.

Semi-retirement can be a time where you explore new interests, or focus on a different passion, or turn a hobby into a business.  Perhaps turn that side gig you’ve had for a while into a full-time job.

Whatever you decide, do what you can to ensure your health is up for the extra work.  You don’t want to have to count on that income only to find out that your body ain’t havin’ it.

Don’t forget to grab your free 50 Tips to Save More Money checklist!


Don’t continue to fall behind on your retirement savings

Even if you’ve been putting off your retirement savings for decades and now you’re starting to feel the pressure, there are steps you can take today to start catching up.

The important thing is to start today.  Don’t put it off any longer!

Get a second job to increase your income, cut your spending and pay off your debt.  Then make sure you’re making your retirement more important than anything else (even your kids’ college!).  Educate yourself on financial matters so you can carry out your vision of your future with knowledge and wisdom.

It’s never too late.  Commit to making your retirement savings the top priority, then use some of these ideas to start working toward your goals.

Commit to your goals, to your financial future, and start taking action!

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Behind On Retirement Savings? Here’s 7 Steps To Catch Up

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