Whether it’s advice from their parents, a response to television ads urging viewers to save for retirement or their own financial savvy, many of today’s young professionals recognize the importance of saving for retirement from the moment they receive their first paychecks.
However, those over 50 may not have been so practical, and many such professionals may feel a need to save more as their retirements draw ever closer.
Saving for retirement might seem like a no-brainer, but the National Institute on Retirement Security notes that, in 2017, almost 40 million households in the U.S. had no retirement savings at all. In addition, the Employee Benefit Research Institute found that Americans have a retirement savings deficit of $4.3 trillion, meaning they have $4.3 trillion less in retirement savings than they should.
People over 50 who have retirement savings deficits may need to go beyond depositing more money in their retirement accounts in order to live comfortably and pay their bills in retirement. The following are a few simple ways to start saving more for retirement.
Redirect nonessential expenses into savings
Some retirement accounts, such as IRAs, are governed by deposit limits, but others, such as 401(k) retirement plans, have no such limits. People can examine their spending habits in an effort to find areas where they can cut back on nonessential expenses, such as cable television subscriptions and dining out. Any money saved each month can then be redirected into savings or retirement accounts.
Reconsider your retirement date
Deciding to work past the age of 65 is another way those over 50 can save more for retirement. Many professionals now continue working past the age of 65 for a variety of reasons. Some may suspect they’ll grow bored in retirement, while others may keep working out of financial need. Others may simply love their jobs and want to keep going until their passion runs out. Regardless of the reason, working past the age of 65 allows for more savings for retirement, while also delaying the first withdrawal from such accounts.
Reconsider your current and future living situation
Housing costs are many people’s most considerable expense, and that won’t necessarily change in retirement. Even those who have paid off their mortgages may benefit by moving to a region with lower taxes or staying in the same area but downsizing to a smaller home where their taxes and utility bills will be lower. Adults who decide to move to more affordable areas or into smaller, less-expensive homes can then redirect the money they are saving into interest-bearing retirement or savings accounts.
Many people begin saving for retirement the moment they cash their first professional paycheck, but even adults over the age of 50 sometimes feel a need to save more as their retirement dates draw closer, and there are many ways to do just that.