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. But men and women 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 United States 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.
Men and women over 50 who have retirement savings deficits may need to go beyond depositing more money in their retirement accounts 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. Men and women can examine their spending habits 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 and/or retirement accounts.
• Reconsider your retirement date. Deciding to work past the age of 65 is another way men and women 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 men and women to keep earning and saving for retirement, while also delaying the first withdrawal from their retirement savings 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 men and women 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.