What to do if you got a late start saving for retirement

Too Late for Retirement Planning?

by Rick Kahler

Related Articles

I'm Nearly Retired Without Any Savings

Ready to Retire at 70? Or at 84?

When Your Retirement Savings Do Not Equal Your Retirement Goals

A Tool to Determine the Best Time to Take Social Security Benefits

Financial Independence. It's the time in our lives we retire from actively earning a living. For many of us, it's way out there in the future, something to plan for "someday." We're too busy with our lives, our families, and our careers to pay much attention to it.

In some cases, that inattention lasts until people are in their 50's or even 60's. All of a sudden it hits them that "someday" is getting closer fast and they aren't ready. They don't have anywhere near enough in savings and investments to provide a sufficient income when they are no longer earning.

If you're in this situation, it's time to get serious about planning for financial independence. But don't panic. Before you start pricing cat food at the grocery store and hinting to your kids about moving in with them, try these strategies first:

  1. Cut back now so you can be more comfortable later. Make saving and investing to become financially independent your primary goal. This means no new cars, no new toys, no expensive vacations, and no funding college educations for kids or grandkids. Take an inventory of your spending and then go over it together to find all the places you can cut expenses. Create a spending plan focused on freeing up funds to invest for your future.
  2. Consider downsizing now instead of later, but only if you can live more cheaply by doing so. If you can sell your house for, say, $250,000, buy something smaller for maybe $150,000, and invest the difference, this might a smart move. This works best if you have substantial equity in your house, meaning it is paid for or your mortgage is small.
  3. Get rid of debt. Stop using credit cards unless you pay the bill in full every month. Pay off credit card balances and any other personal debt.
  4. If you and your spouse are both working, pretend one of you loses your job and you have to live on one income, then put the second income toward saving and investing to become financially independent. A spouse who isn't employed might consider getting a job solely for saving and investing.
  5. Accept the reality that you're probably going to need to postpone retiring from work. If you enjoy your work, you might be happy to stay employed for a few more years. If you don't, look into possibilities for changing careers now. Or you might make plans for a second career after you retire from your current one.
  6. Will you leave
    thousands of dollars on the table
    by taking Social Security
    at the wrong time? Find out.

  7. Take an inventory of your assets. Include your savings accounts, investments, and retirement plans. Don't forget to include your Social Security income (yes, it will be there if you are over 55) and assets like a paid-for house or valuable personal property. Add in hobbies, skills, or interests that might bring in some part-time income. Also include intangible assets like health, family, and friends. These may not affect your finances directly, but they have a great deal to do with your well-being.
  8. Remember to enjoy the present. You may be cutting back on your spending, but don't discourage yourself by cutting back so much that life in the here and now is bleak. Find creative and inexpensive ways to stay involved in activities that are important to you and enjoy time with friends and family.
  9. Don't waste time and energy beating yourself up because you didn't start saving earlier. Instead, give yourself credit for what you are doing now. Remember, you aren't depriving or punishing yourself. You're investing in yourself in order to build a more comfortable future.

Rick Kahler

Rick Kahler, MSFP, ChFC, CFP, is a fee-only financial planner and author. Find more information at KahlerFinancial.com. Contact him at Rick@KahlerFinancial.com or 343-1400, ext. 111.

Take the Next Step:

  • Determine if debt could derail your retirement and what you can do about it now. Our checklist can help you. Afterall, one of the most important ingredients for a comfortable retirement is to be debt free when you retire.
  • Subscribe to After 50 Finances. You've learned how to work smarter, not harder. This weekly newsletter is dedicated to people just like you. Subscribers get a FREE copy of our After 50 Finances Pre-Retirement Checklist, a list of everything you need to do to be ready for retirement.
  • Find tools and resources geared specifically for the 50+ crowd in The Dollar Stretcher section dedicated to your financial issues. If you're over 50, your financial needs are different. And so are your questions.

Share your thoughts about this article with the editor.

Stay Connected with TDS

Social Security Choices


You've learned how to work smarter, not harder.

After 50 Finances is a weekly newsletter dedicated to people just like you.

Retirement Checklist

And get a free copy of the After 50 Finances Pre-Retirement Checklist. Everything you need to do to be ready for retirement!

Your Email:

View the TDS Privacy Policy.

Debt Book