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.
Personally, I didn’t graduate from college until I was 27. I had my first child at 30 and my last at 36. I was a stay at home mom until I was 44. And then, I’ve only worked part-time for the last 7 years so I could continue to be there when my kids get home from school.
For me, being home with my kids was more important than having a career. But this choice has resulted in living paycheck to paycheck on one income, and not having much to invest for retirement.
Thankfully, we’ve been consistent for 20 years with putting something into our 401K. As my husband’s income has increased, we’ve been able to contribute up to 10% of his weekly paychecks.
Still, we’ve only got 15 years before we’d like to retire and we are not on track to make a comparable income without continuing to work into our retirement years.
So, I scoured the internet to see what experts have to say about catching up in your 50s. Turns out many of their ideas were already on my list, but I did learn a couple of extra strategies as well.
Have A Vision And A Plan
Okay, this is top priority, strategy numero uno.
Before you get to where you want to go, you need to figure out how to get there.
I really didn’t start thinking about what I wanted retirement to look like until this past year. Writing this blog is forcing me to be more aware of where we’re at in our finances today, and what we need for the future.
Admittedly, I have not had a “dream meeting” with my husband, like Chris Hogan recommends. But it’s on my to-do list, and I know this is going to be necessary in order for us to plan effectively.
Have a conversation with your spouse or partner about the most magical retirement you can think of, then have them share theirs with you.
Figure out what’s similar between both, what’s unique to each, and what you both can agree on.
Write it all down. Research what a budget would look like. Prioritize expenses by what you value the most. If your list adds up to more than you’re willing (or able) to save, start cutting it down.
Get to a point where you believe your dream retirement is possible and could actually be achieved with the time you have left and the amount you can save.
Now, you can start the planning phase. You know how much you need, so work backwards to figure out how much you’ll need to save.
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.
Finally, have a vision board to keep you motivated. 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.
Increase your income
This is the age of the side hustle.
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 inconvenience your schedule.
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!
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.
Pay Off Your Debt ASAP
The more you have to pay towards debt, the less you have to add to savings.
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!
Put Your Retirement Before Your kids
This one is a tough one for me.
Because of how I grew up, I feel responsible for taking care of my kids. Paying for their college, helping them with their bills, pitching in for their first car. My parents did all these things and more for me, and it became my standard.
Difference is, my dad had the money and I don’t. When I look reality in the face, it’s obvious that if we take on our kids’ financial responsibilities, we won’t have enough for our own.
The best thing I can do for my 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 I won’t pay for their 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. And they will make them, fer 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.
And 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.
I really wish I had become better educated on personal finance, budgeting, and investing when I was younger. I think just the knowledge would have motivated me to make our financial future more of a priority.
But that’s what happens when you live in denial; you fail to acknowledge the importance of your choices today and how they affect all of your tomorrows.
The good news is, it’s never too late. I can start now to educate myself towards smarter financial outcomes.
I keep a list of books that focus on money mindset and money management. Each time I go to the thrift store, I browse the book section and usually find at least one on my list.
Here are a few topics that I’m learning more about:
- 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 my 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.
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.
In A Nutshell
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.
You can do it!