two men playing chessHow to Save for Retirement When You Start Late


Many people reach their 40s, 50s or even 60s without having adequately saved for retirement. While starting late puts you behind, you can still take steps to fund a financially secure retirement. Here are some strategies to boost savings when you get a late start:

Maximize 401(k) contributions

Making the maximum allowable $20,500 annual pre-tax 401(k) contribution, plus $6,500 catch-up contribution if over 50, enables you to quickly build up your nest egg. Increase your deferral percentage annually to work up to maxing out.

Open an IRA

Beyond a 401(k), contribute up to $6,000 annually to an IRA, plus an extra $1,000 if 50 or older. IRAs diversify your tax-advantaged savings. Choose Roth contributions if you expect taxes to rise.

Downsize major expenses

Cutting costs on large expenses like housing and transportation can free up significant funds to dedicate to retirement savings. Consider downsizing your home or purchasing a more economical used car.

Pick up a side gig

Taking on part-time work or freelancing is an effective way to boost your income specifically earmarked for retirement savings. Tutoring, online sales, ride-sharing or consulting can generate extra savings.

Delay Social Security

For each year beyond your full retirement age you delay claiming Social Security, your benefit amount rises about 8% up to age 70. Delaying can notably increase this income source.

Invest aggressively

Being more heavily weighted in stocks gives you growth potential while you have time to ride out market swings. Maximize stock exposure up to your risk tolerance as you play catch up.

Look for windfalls

Use any unexpected monetary windfalls like bonuses, tax refunds or gifts to make extra lump sum contributions to retirement accounts. Don’t divert these funds elsewhere.