Retirement Saving Plan Strategies for Late Starters

We’ve all read articles about retirement strategies and the consistent advice is to start setting money aside as soon as possible. The longer you put it off, the less time your assets have to grow to last you through your golden years.

According to the 2017 Retirement Confidence Survey, about 1 in 4 workers (and 1 in 5 retirees) said they had less than $1,000 saved for retirement. A whopping 55% of workers and 38% of retirees had less than $50,000.

So while you may not be alone, you also don’t need to be scared about retirement, either.couple taking to advisor

Speak to a financial advisor

Your first line of attack should involve speaking to a financial advisor. He or she can thoroughly guide you through your options and devise an offensive plan to get you comfortably to your golden years.

Using an investment and retirement service in tandem with a financial advisor could possibly maximize the likelihood of your retirement plans coming to fruition. Getting a birds-eye view of your nest egg and the progress you’re making will only further inspire you.

If this is your first time tackling the whole idea of retirement, be certain to also read-up on the basic components of what goes into retirement planning. We recommend the basics of retirement to get you started with the foundations so that you are well-versed to take control and steer the ship when necessary.

Take advantage of catch-up contributions

If you’re over age 50, you may be feeling a lot more pressure to build-up your retirement savings. As luck would have it, you could be able to make catch-up contributions to your retirement fund, depending on the type of retirement account you have. As an example, for tax year , there was an allowance to save an additional $1,000 in your traditional or Roth IRA accounts. The catch-up contribution limit for 401(k) plans, 403(b) accounts or a 457(b) is $6,000. For SIMPLE plans, you are were able to put an extra $2,500 in it, and as for SEP IRAs, there are no catch-up contributions allowed.

Aggressively decrease your expenses

Minimizing your expenses will free-up additional cash that you can squirrel away in savings and it can give you some breathing room if you’re expecting your income to drop once you retire. While you may not need to do something as drastic as selling your home, getting rid of high interest debt and looking for ways to save on your bills can make a huge difference on whether your nest egg will last.

Eliminate all form of consumer debt

A sure-fire way to get aggressive with retirement is by tucking your credit cards away so that they can only be used in an absolute emergency. If you do happen to have credit card debt, work very diligently to get it paid off as soon as possible. By eliminating that worrisome debt, and combining your savings into retirement or high-yield savings accounts you will be well on your way to a better retirement. Head on over to your bank account and automate a fixed portion of your savings to your retirement savings investment account. If you already have that set-up, run some calculations to see if you can squeeze in a few hundred extra dollars per month. Every little bit counts!  

Finally, what do you do when you get your raise, bonus or promotion at work? You put 100% of that raise into your retirement account! OK, we’re kidding…give yourself a little treat because you’ve worked hard. Please be aware of the dangers of lifestyle inflation and keeping up with the Joneses, though. It’s a silent killer that will derail your retirement plans; one purchase here, an upgrade to the kitchen there, and you’re back to square one. Consider adopting these financial habits from debt-free people

couple in living roomBe creative & resourceful

It’s time to get your thinking cap on. Take a look at your current situation to see if there are any opportunities for you to pad your income. Be creative and be resourceful. Is there a spare room in your house that you can rent out? Are there things in your garage or attic that could use a new home? Are there any other hobbies or skills that you’ve developed from which to start making a little money? Are there any part-time jobs that you could do during your free time?

It doesn’t solely have to be about finding more ways to increase your income, but it could also be about what you can do to save more. If you’re lucky enough to make a little extra money while also cutting your spending, you could possibly see gains in your retirement account.

Are you driving a new car that you’re still making monthly payments on? Consider selling it and buying a reliable used car. You may also want to shop around for cheaper insurance plans or eliminate unused subscriptions to entertainment channels like Netflix, Hulu or Spotify.

Convert Non-Earning Assets Into Retirement Savings

You should also look into converting your non-earning assets into retirement savings.

The most obvious way is to downsize your home. Could you utilize the equity that you’ve built in your home to move to a smaller house? Living in a smaller space has tons of savings advantages since you’re living more minimalistic and efficiently. Everything from taxes, insurance, and utilities will all be drastically lower.

The next idea may be a little extreme, but could work in your favor if you’re really determined and have little to lose—relocating to an area that has a lower cost of living. We know we all love living in the big city or an affluent suburb with all our creature comforts, but moving to a cheaper area could possibly secure your retirement a little quicker. The difference from relocating to a cheaper housing market can significantly alter the course of your retirement date.

Finally, do you have any antiques, jewelry, valuables or collectibles that you could potentially convert into productive investments? That boat that was parked in the docks all year, grandma’s favorite mink fur coat, and other infrequently used, yet valuable items, could give a boost to your retirement savings. If your comfortable with selling them and allowing those “assets” to get you closer to a better retirement, let them go!

Bottom Line

Retirement planning can be started anytime no matter your age or where you are in your financial journey. You can still have your slice of the pie even if you’re late to the party. All it takes is a smart strategy and the focus and dedication to succeed. Good luck!


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Guided Wealth Portfolios (GWP) is a centrally managed, algorithm-based, investment program sponsored by LPL Financial LLC (LPL). GWP uses proprietary, automated, computer algorithms of FutureAdvisor to generate investment recommendations based upon model portfolios constructed by LPL. FutureAdvisor and LPL are nonaffiliated entities. If you are receiving advisory services in GWP from a separately registered investment advisor firm other than LPL or FutureAdvisor, LPL and FutureAdvisor are not affiliates of such advisor. Both LPL and FutureAdvisor are investment advisors registered with the U.S. Securities and Exchange Commission, and LPL is also a Member FINRA/SIPC.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change. 

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal.  Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

 Withdrawals from SEP-IRA accounts are subject to taxes and additional penalty may apply.