How do you save for retirement if you’re starting late?  Both hubby and I started late but we managed to pull it off.  So, if you’re in a similar situation, read on!

Before you can come up with some kind of strategy, you need to determine if you have anything saved.  If so, how much?  Of course you need to look at your income, your monthly expenses, and your debt.  You need to know your numbers so that you can formulate an actual plan, not a speculation.

If you’re 50 years of age or older, the IRS will let you put in what’s called catch-up contributions.  What are those?  For example, in 2025, anyone can put $23,000 in their 401(k), 403(b) or 457 plans.  But, if you’re 50 or over, you can add an additional $7,500 to your plan each year.  A Roth IRA is different.  The regular limit is $7,000, but you can add a catch-up contribution of an additional $1,000.  If you have the funds to spare, you can build your retirement funds fairly quickly by using the catch-up contribution feature.

But what if you don’t have the extra money?  Then, you’re going to have to make some tough decisions.  You might have to downsize your home, refinance, or rent a room.  You might have to sell that newer car with the big payment and buy a good used one with a much smaller monthly obligation.  And, you may have to watch your restaurant spending a lot closer.  Think about putting your planned retirement date off.  That would allow you to save more, give your funds more time to increase in value, and your Social Security payments would rise.  Remember, for every year you hold off taking Social Security past your full retirement age, your benefit will increase by 8% each year until age 70.

Moral of the story:

I started saving for retirement late and so did hubby.  But, because we were frugal, and saved like mad, we were able to retire comfortably.  Every spare penny went into our retirement funds.  Was it fun?  Of course not!  But was it worth it?  Absolutely  We’re not rich but we are able to pay our bills, and have some fun along the way.  All of our needs are covered and we don’t expect to run out of money before we run out of life.  And that’s the bottom line.  It’s never too late to start!