It’s Never Too Late to Save for Retirement

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(updated December 10, 2019)

Whether you’ve just started thinking about saving for retirement or having been saving enough, you can ramp up your efforts and still put aside enough to retire. There are five specific steps you should take to start increasing your retirement savings today.

1. Max Out Your Contributions

People younger than 50 can contribute up to $19,000 (2019) and $19,500 (2020) of pretax income to a 401(k) or other employer-sponsored savings plan each year. After turning 50, that amount jumps to $24,500.


By maxing out your contributions, you not only increase your retirement savings, but you also reduce your taxable income. This may mean cutting some spending now, but consider your long-term goals and figure out what you can reasonably cut back on now for the long-term benefit.

2. Invest Extra Money

If you get a raise, a bonus, or a refund from the IRS, invest all of it in your retirement accounts. If you’ve maxed out your contributions to tax-advantaged funds, look at alternatives such as stocks or mutual funds. While it can be tempting to spend these extra dollars, approaching your retirement savings fiercely is the best way to make up for lost time.

3. Take Calculated Risks

Typically, financial planners suggest shifting towards a more conservative investment approach the closer you get to retirement. However, if your portfolio is still small, it may make sense to skew it towards slightly higher risk growth equities. Even someone who’s 60 years old may have 20 or 30 years to plan for part of his or her retirement funds. Be careful, though, and avoid chasing “magic bullet” investments.

4. Reconsider the College Fund

While it’s admirable to want to help your kids pay for their education, the truth is that there are many financial aid options available to them, while you have only one way to fund your retirement. Particularly for parents who had their children later in life, it may be worth focusing on savings for your retirement and helping your children find alternative ways to pay for college.

Alternative College Funding Options

  • Grants
  • Scholarships
  • Trade schools
  • Work study
  • Tuition payment plans

5. Work a Little Longer

Anyone born after 1960 qualifies for Social Security benefits at 67; however, the government will increase your payments by up to 8% every year until the age of 70 as an incentive to delay collecting. You may decide to retire from your current career and work at something else, but each year you can hold off can dramatically increase your retirement income.

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