Sometimes, it seems as though personal finance advice is all about what you should have done. But we’re all able to easily identify the mistakes we’ve made in the past. The important advice is what you should do to correct those old mistakes. Shoulda coulda woulda is singularly unhelpful in those situations.
This is particularly true when it comes to retirement savings. If you’ve already received your AARP card and still have not started putting money aside for your retirement, those charts showing how much compound interest will earn you if you start saving in your 20s are depressing at best.
But workers in that situation can’t afford to wallow in their “if only!” feelings, even though they might want to. Instead, they need to make a plan for the next 15 to 20 years:
1. Start putting money aside right this minute. It doesn’t matter if the amount of money you think you can afford to save is relatively low. Just putting some money into a retirement account is a step in the right direction. If your employer offers a 401k retirement plan, make sure you at least save enough to qualify for their matching contribution. It may not seem like much, but you’ll be very glad of the extra padding to your account once you start seriously thinking about retirement.
2. Downsize. If the amount that you are putting aside is not sufficient to keep you comfortable in retirement, then you need to start thinking of ways to cut your expenses so that you can add more to
your retirement savings. Can you sell your house and live someplace cheaper? Can you trade your car for something cheaper, or lose it altogether? Are you paying for memberships or subscriptions that you’re not using? Do you eat out several times a week? Be willing to slash your expenses to the bone. You couldn’t ask for a more worthy cause than taking care of yourself in retirement. (Here are some more advice on how to downsize.)
3. Maximize your investments. Enough people are in the same lack-of-retirement-planning boat that there are several provisions for those who are over 50. While younger workers can only contribute a set amount to their 401k and IRAs, savers who are over 50 may funnel as much as $5,000 more every year. Take advantage of these higher limits and reap the rewards when you’re ready to retire.
4. Plan on working longer. The difference between how much you have saved to retire at 65 and the amount needed if you wait until you’re 70 can be enormous. In some cases, it can mean that you have to give up less of your lifestyle in favor of savings. If you love your job, why not just plan on staying there longer so you’ll have a little breathing room? (Alternatively, you can look into these ways to earn more money so you can still quit and enjoy income.)
5. Get professional help. When it comes to retirement planning, it can feel awfully intimidating trying to navigate the options. This is particularly true for workers who haven’t started saving before age 50, since they would likely have worked on their retirement savings sometime earlier in their careers if they hadn’t found investments intimidating. If this describes you, find yourself a qualified and objective financial planner to help you sort out your investment options. The National Association of Personal Financial Advisors can help you locate someone you can trust with these important decisions.
Starting your retirement savings late is not ideal. But rather than lament what you could have done differently, be proactive now and stick with it. You’ll be so glad you did.
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This is a great wake up call for ANYONE who is not saving for retirement, no matter what age. You should continue to run this article every so often. I too had no money saved for retirement when I turned 50 and it was not because I did not have enough income. We never made much money but my husband and I just pretty much spent what we had and enjoyed life. My parents and grandparents tried to quietly suggest that I start to put money aside as far back as my 20’s and I kept telling myself, “maybe next year”. When we turned 50 and realized we did not have ANYTHING saved, we got extremely aggressive and cut out many unimportant things in our life, spent money much more wisely and started putting money away even though it was very minimal at first. Between the ages of 50 and 65 we have been able to save a nice nest egg. We have been very blessed and now we try to pass on that blessing by encouraging all of our younger friends and relatives to start saving something, even if it is just a very small amount. (The Dave Ramsey book “Total Money Makeover” is a standard gift we give to encourage others.) The many heartbreaking stories that have been told here since this article first appeared should also be a wake up call for everyone. Bad things happen to good people and some are very difficult to recuperate from. Please do not lose hope! Many of you will be an inspiration to someone, even though you may never realize it.
Thank you for sharing such a great story Connie!
Your example shows that it’s never too late to start saving and your story will give people hope that they too will be able to have a comfortable life as long as they put their mind at consistently putting money away.
I appreciate this article. So many of today’s bloggers, especially those in the FIRE community talk about retiring in their 30s and show how they’ve done it, suggesting everyone can do it.
You addressed a big issue. Those who are past the millennial/Gen Y/X stages with little to no savings. They need help, and no one is addressing them. You offer valid ideas for folks to consider. Downsizing and reducing expenses to save more is the key. Hard to implement, but so important.
Thanks again for sharing.
I’m 48 with just around $2,000.00 saved and I still live at home with my parents. We suspect I may have Asperger’s syndrome because I have had 27 jobs since I started working at about 18. I will try and save, but when I lose a job I have to live off my savings. Sometimes I get unemployment, but it’s usually not much since I only work for a couple of years then get fired. The longest Ive had a job has been 4 years. The job I have know seems to be the best one I ever had, but if I lose this job, I’m thinking I might be better off getting disability, but I don’t know. I’m afraid of my future, especially when my parents die.
Paige, I have an adult son with Autism diagnosed at an early age. Reach out to Alta Regional Center if you are in California or call them so they can refer you to your state’s center. They can assist you in getting a diagnosis and other related services. You might be able to get IHSS which is monthly monetary help for your disability and or get you to get into Social Security and other living assitance programs. In Los Angeles they go by Lanterman Regional Center. If you can go in person it will definitely be better but not necessary and request to speak to a service coordinator. If you want to reach out to me leave me your email. Good luck and blessings!!
Right now my husband and I are so depressed over our finances. He contributes to his 401K, which took a huge hit during the bank fiasco. He’s 53, I’m 64 (nearly 65) & on disability. We made the mistake of getting credit cards. I’m trying to pay mine down, then shred them. I got a couple of no fee cards & transferred what I could to them. We don’t owe much, but I know it’s a drain, even though they’re rewards cards. I have a lot of health issues, & we’re both bipolar, so when we both get depressed (true clinical depression), things seem especially bleak. Usually our cycles are staggered, but now we’re both depressed. I get $850/month from SSDI, & my husband won’t get much more. We have no idea what we’ll do when he loses his job. Right now he’s talking about suicide. If I weren’t a Christian, I’d seriously consider it myself.
Wow. I hope you have family to lean on. Perhaps a church/charity can help out. Have you exhausted all government programs? I wish I had better suggestions for your situation. I don’t think suicide is the answer. Are you getting treated for your depression? You need to get that fixed or under control as soon as possible. God bless and best of luck.
God knowns your situation, Don’t condemn your soul, over this world. God still has a path for you. Trust God, Read his Word, Do His World. Become a good steward, get rid of what you down need. With a relationship with Christ, God Knows.
Wake up people…there will be no savior …no retirement equals living as a senior in poverty and on the streets. I am 54 with nothing. Been self employed 90% of my life earning well under $20k a year…so no retirement savings and minimal social security. Will get $1k if I retire at 70! Plan on suicide…it is really the only answer unless you want to die a gruesome death on the streets
I’m 51 years young (feel like a 100 most days) I had a Great Job with Ford Motor Co. I was married have two beautiful daughters, That for the last 12years I Raised By Myself. They Both Graduated 6 months early on the honor roll. But now they are out in life on their own. I’m home single (not even a date in over 5 years. I have no money, just enough to get by. I’m on my S.S due to a No Fault accident. Had several back,, surgeries both hips replaced last year. I don’t have ONE Friend, seems after my accident nobody wanted anything to do with me??? I don’t get it. But I DONT want to Live out the rest of my life alone. My family is all over the U.S. I really don’t talk with anyone. my only entertainment Is TV or surf the web. I love to fish, I cant afford the gas to drive to lake, and I cant walk that far. It takes two people to live nowadays. It’s not so much the money, It would be nice to have some adult company find that Special Someone to share and do this together, Maybe that would get me out of this Depression?? I’m to old to play games. I tell it like it is, those game days are OVER. I never really did care for them anyway. Just makes trouble. I’m Honest, like I say I tell it straight. At this age (NO DISRESPECT) I like to meet a woman around my age, slender that doesn’t wear a lot of make-up, likes the outdoors, or cuddle up on the couch watch a movie, Like I say I’m Not rich, But maybe with the right (I’m saving what I can) woman, WE CAN MAKE TWO PEOPLE HAPPY together.?. Not trying to sound rude at all, Just honest, and again I don’t play games.
Family is the key, God word, Love one another. It will be Family that we all need, Forgive all the past and focus on what God has for you. God woke you this morning, take advantage of it, give God some of this time. Think on positive things, Satan just need a thought and you are his toy. God is waiting , call Him.
Great Article! The hard truth is what we need more of. Most people spend more time planning a vacation than properly preparing for retirement. Those that only have a 401k are most likely in for a rude awakening.
To those who say they can’t find any money to save I say you can if you just start looking even if its small. Lets say you find a cheaper cell phone company that cuts your bill by $10 to $15 and you start putting that in an account. It seems insignificant at first but it gets the ball going. Once you do that you do start to think of other ways you can put money aside. I myself didn’t start until close to age 48. I had nothing and a lot of debt. I’m now close to 56 and I have saved $50,000 and cut my debt back. This even after I had $8,000 in medical bills to pay since 2012 and almost paid. ING offered me $50.00 to open an account and that is how I started. I even put change in a cup and put into savings every 6 months. Any unexpected money like a tax return I put into savings. Took out some CD’s which earns some interest. You can do it even it starting small. Make one of your bills to pay yourself such as $50.00 a month and if you cut other expenses it adds up to more than $50.00. Work extra hours or get part-time work and use that money for retirement account.
It is always better to set your retirement planning target. Before you choose your pension plan, you should estimate that how much money you would need to maintain your lifestyle once you are retired from your job. Also, you must try to convert at least seventy per cent of your pension funds to income.
I am 57 with no money, savings, or retirement account. I felt called to Christian ministry in my 20’s so I didn’t focus on a career. Long story short, sickness – illness, -home loss, -and a handicapped child took all my resources. I am not angry bit the rest of my life is in God’s hands now. Please pray for me.
Anthony ~ My heart breaks and my eyes well with tears reading your story. Our story is similar and we live on the edge too. I did just spend some time in prayer for you. For ourselves, we are hanging on to believing God has us in his hands even when it feels like we’ve been dropped. I still believe he has us — and you.
Anthony, I just read your post and said a prayer for you. I am 50 just turned 50 and it hit me in the face that I have no retirement savings. I am a believer as well and you out it into GODS HANDS and I believe if you have dine the right things with a good heart, he will take care of you in your time of need. Keep you eyes and ears open because he is going to takes care of you, you just have to be ready to hear or see what he is doing for you. God Bless: ERIC
P.S Please say a prayer for me and my family as well.
Anthony sending Thought’s and Prayer’s. That had me pull a tear, I’m in about the same boat, Like most everyone here, I have my faith in the Gods hand’s. He is in my heart always will be. I just Pray someday, Something good will happen for US ALL~!~
I am 42 and my husband is 43 we have a 13 yr old we hardly ever get support for and a 11yr old we pay 500 a month for plus medical for both. How on earth can I save any money every time I get alittle saved say 1,200-1,500 something comes up and takes it all. we drive a 20 yr old car have no credit and rent. at the end of bills and food there is nothing left. pay check to pay check and some times the food bank. I have a two yr in marketing management and he has self taught computer skills and works for a company from home. we make less then 40,000 a year. 6,000 alone goes for child support. I am so lost I don’t even know how to pick up the pieces to fix it. I was a single mom for the last 12 yrs and still have never been able to save more then 1,500 and then have to fix a car or pay something. behind on medical bills every where. and most pay checks beyond bills can hardly keep food on our table. I have already told our grown kids that they are going to have to take care of us some day cause there is no way we can save anything. broken In Missouri
I know this thread is old. But … your grown kids may NOT want that responsibility nor have the means to do it. You can’t just call up kids and say, “Hey – you’re responsible for my retirement.”
If they help out – consider yourself blessed. But it isn’t an expectation you can put on them due to your lack of planning. That is NOT a reason to have kids – though I suspect some people have kids with that specific reason in mind …
@John, I’m so sorry that happened to you. I’m sure things will pick up. Can you contact your alma mater to talk to other alums in your field? I know that my college is very diligent about keeping us in touch with each other and some old contacts from college might be very useful to you.
I am a small biz owner. I lost everything I owned with the economic downturn. I had 3 homes, 2 of which were rentals. My business dropped off about 33% and I couldnt keep up with payments. I drained my savings, and used everything to save my business. Now I make a meager salary, live in a tiny 1 BR apartment and have no savings.
Even with an MBA in Finance and Accounting, almost 10 years of business experience, no company wants me because I am in my late 40s and a white male.
Recruiters just put their heads down and pretend I am not there when I meet them. Everyone else says I am overqualified. I’m in the black hole of the late 40s early 50s. My only hope is to die young.
Hello John,
Saddened to read your story. All may not be lost, it is just difficult to see opportunities while you are low.
Have you thought about consultancy as a business mentor – you have done the hard yards and learned lessons along the way. Choose your clients wisely – those with good ideas that will go the distance with your help.
Mentoring could not only bring in some money, but re-establish a small business, get you out there with people, improve your confidence and get you networking again for other opportunities.
Good luck,
Judith
I’m 46 and have no retirement plan yet! I do own my house and 118 acres of land, all paid for. Does anyone know what I should do to get a retirement plan so I can retire at 70?
Yep. Rent your acreage if you’re not planning on farming it yourself. You have to pay property taxes on it anyway, you may as well see if you can get it to make you some money.
We are all forgetting one last very important tip. TEACH OUR CHILDREN HOW TO SAVE! I truly believe that most of us did not get good advice from our parents on how to save or manage funds properly or the truth about credit and debt. We need to end the cycle of ignorance and set our children on the right paths so that they can live better than we did!
So basically, i am 46 now and I am not planning on ever leaving the workforce. I may retire from full-time work and take social security but i will be working part-time until i am at least 76. Unless my health deteriorates.
Well, i was a stay at home mom for 16 years until my husband had a long term affair with a younger woman (who eventually ended up leaving him for another married man with more money) resulting in our divorce.
When i returned to the workforce at the age of 42-i faced a considerable amount of age discrimination. Despite having a college degree and having kept my skills up through part-time and volunteer work, they only thing employers seemed to be interested in was hiring and promoting the next young thing with little to no experience or degree.
I literally did all the job functions (through a temp agency) of a 22 y/o human resource boss that was often late or absent and they still wouldn’t hire me on permanently or promote me. Other workers and contractors came to me, not her, for answers and help in hiring- being that she rarely answered her phone and so contractors could not reach her. And still, they wouldn’t hire me as a permanent employee.
It then became apparent that the married vice-president was sleeping with her.
I saw the situation as hopeless and gave 2 weeks notice after accepting another assignment. They implored that i stay (as a temp of course) and at least if i was leaving, to give this 22 y/o human resource manager all the info i had in order to bring her “up to speed”. ROFL. Not happening.
8 months later i find out that the company had to close that office due to their inability to meet contractual obligations to bring on much needed employee contractors for their clients. A responsibility that she held along with another co-worker. So they lost their clients, contracts you name it.
Case in point–hiring younger workers is not always the best bet. In fact, it can be more detrimental to hire inexperienced, unmotivated younger workers simply because an employer thinks they have more “staying power”.
In the end, her incompetence and her vice-president’s inability to think with his brain instead of his Pen*s sank the whole boat and everyone lost their jobs.
Only she was able to get another one rather quickly due to her age, her looks and having held a “HR manager” position, while her other 35+ year old co-workers were still looking for employment a year later.
I was so glad i left when i did. It didn’t take a genius to see that accident waiting to happen.
WOW! I clung onto every word, not that this has happened to me but I am in my late 40s now so I can relate. Experience out weighs the youth period. I tried to get an older gentlemen to fill a position at my branch and corporate management decided against my better judgement to bring in a younger inexperienced worker. Not only does she not know what she’s doing she also has 1/2 the motivational level of someone 20 – 30 years her senior.
I listened to your story. It is indeed deplorable, however I would not write off younger people quite yet.
Ideally, it would be best for younger and older employees/management to learn from each other.
An older person does have more experience and has seen a lot change over the years.
A younger person doesn’t have the experience yet, but a younger person tends to be more open due to not having enough experience to know “what works” yet.
The main reason some companies don’t want older workers isn’t the age itself. It’s the fact they don’t want to pay someone who is experienced, and they honestly do believe experienced/highly educated people will leave the first opportunity they can get.
This may have been true at one point, but with how competitive things are, people tend to take what they can get and stick it out.
Younger people are more willing to work for less and money and less benefits than an older person.
For some companies saving a few dollars is more important than whether or not someone is competent and whether or not the company will be in business long enough for people to retire.
When my ex-husband’s grandmother died her family(kids) went to her home in to collect her belongings.
They discovered money and lots of it in all sorts of containers throughout the house. Cookie jars, coffee cans, between mattresses, in dresser drawers, tin cans in kitchen cabinets, several safes–etc.
When all was said and done and the money was counted, it came out to almost $200,000.
As it turns out, grandma only believed in “some” very conservative investing into solid companies with staying power such as the phone company etc. BUT she didn’t believe in putting all her money in the stock market or the banks– being that she survived the great depression with horror stories.
So she kept a shot gun and socked every bit of money her and her husband made in their home (she lucked out that there wasn’t a fire).
They lived on Social Security and Pensions from their jobs mostly. As she got older and was diagnosed with Alzheimers, she gave all of her investments to family members and gave instructions to her daughters to come pick up everything in her house the minute she died. Her daughters had no idea she had kept so much money at home.
I am an Aussie and when I read, hear and see what you guys have been through as you approach or are in retirement, I realise just how fortunate I am as I look at my meagre but frugally saved earnings as I approach 60yo. I have lost money in my superannuation accounts (Retirement Accounts) due to the financial events in USA, and as angy as I was at the time, I have regained some ground in these accounts through diversification choices in the accounts. I am constantly afraid of what could happen again and keep a keen eye to financial events to ensure I switch down to ‘cash option’ when there is a continual trend downwards. I almost own my comfortable, largish home and still managing to pay far more than the bank requires. My home is holding its value.
For many of you it must seem hopeless – hang in there – it can only get better, surely. Thinking of you and understanding your pain.
additional: think laterally – no really. Don’t forget that spare room or two that can earn you money by taking in a student or another person on the street without a home but who has enough cash to pay for a room and board/share the home maintenance and housework; company or even has skills which could be useful and compatible with a mutual business idea working from home. …………… goodluck with thinking about it.
Nice article, but realistically, not everyone can or will retire. I won’t. 28% of my income goes to child support, and my ex does nothing towards their college tuition. I want the best for my kids, so that’s fine. It’s more than my parents did for me. I put myself through college, which I’m also still paying for. My credit rating is perfect, but I’ll be poor and work until I die. Oh, and the house value is now half of what I owe on it thanks to all the foreclosures in my neighborhood.
Well I’m a 55 year old single woman and don’t have a cent to my name and nothing for my retirement. I had to declair banckruptcy 2 years ago and lost everything I worked so hard for. My house, my car, my business, etc.. My total income a month is $599.00 a month. After I pay my bills I don’t even have money for food so how am I suppose to save up for my retirement. Specially when I can’t find a job because of health problems. No one wants to hire you when you are coughing in their face. I tried a few online jobs that never paid out. So yea, I’m screwed. 🙁
I know how you feel minus the single part. I’m 56 married and lost everything again and again. We work hard all our lives and try to live the American dream only to lose it all near the end. The only hope us babyboomers have is that we die before we are to old to work or no one will hire us because of our age or lack of a collage degree. All that we have is the knowledge that we are not alone in this world as we slowly go down with the ship. Prayer is all we have left!
dont be disheartened. We also had more than sufficient property but one by one they all slipped from our hands. But have faith in god and a strong planning. start off again. nobody keeps lying down when he falls everybody gets up and starts the journey. gear up and cheer up i am also 53 and my hubby 59.
Well, when I am 65, my Wisconsin state pension will be $446/month. Social Security will add just over a thousand. Then deduct the Wisconsin medicare plus insurance which is $400/month and you also have to deduct Medicare. That leaves me living on way less than $1,000/month. That is not even close to living a comfortable life.
Sounds like you don’t plan to have any savings. Small pensions and Social Security were NEVER intended to be the sole source of income for retirees, but people retire only on that, then wonder why it’s not enough. What’s more, that Social Security benefit may not be around in the same form when it’s your turn to belly up to the trough. So Save Save Save, because really, it’ll be your own @$$ you’re saving in the end.
I sometimes think that human beings are too engrossed in materialistic stuff and forget about impermanency. As long as you can live a comfortable life with basic needs met, then improving one Karma for a better life ahead are more important.
Are you thinking perhaps a camping tent, a rifle, a generator and a fresh water source? Fine for those who are still active and intend to remain that way for the rest of their lives. As for accommodation in town – well….! Can you eat Karma or does it provide a roof and physical warmth?
@Khatlady, I’m so sorry you’re in that terrible position. I can’t imagine how frustrating that must be. It sometimes feels like regular Americans have been sold a bill of goods. We’ve always believed that working hard, saving, and being thrifty would pay off with a good retirement, but that’s certainly been proved false over the past few years. I wish you the best of luck as you rebuild.
I’m in the group of being 50 with low savings. It wasn’t that I didn’t save, I watched my IRA lose 60% with the bank fiasco and subsequent slide. I have not come close to getting it back. The only reason money is in the account is that I am still saving.
Most of your other suggestions need to be updated. My home has lost so much value, I would take a very hefty loss selling it. Rents are high. Bus service has been cut and the closest grocery story would be a 2 mile walk one way.
I am angry that everything I have worked so hard for has vanished and it is not my fault. Hard to think that the one person I know who has come out of this in good shape keeps her money in a coffee can hidden under her bed.
I’m truly sorry Khatlady that you’ve taken such a hit due to this lousy economy and bad business/government decisions for the past decade. You do and did deserve better after working so hard and doing what you’ve been told you should. I hope you can get past your very justifiable anger and find a way to get back on track both economically (and psychologically) for yourself. I’ll be praying for you!
Ditto on the Dave Ramsey book -great financial advice. Instead of buying a new car, buy a good used (3-4 yrs old) one & let someone else pay the high depreciation costs the first few yrs of a car’s life. When u go out to eat, get a water instead of a drink; restaurants get a high profit on beverages. Get yours at the grocery/liqour store, & enjoy at much less cost at home (or w/ your meal if u get it to go). We’ve downsized some & will some more. http://www.morningstar.com is a great site for do-it- yourself investors w/ free classrooms.
I have seen an older friend of mine sell off his car and turn to public transport recently in order to save money for retirement. He said the increasing fuel prices combined with the maintenance, insurance, etc. was just getting too much for him.
-Jean
Investing today for the future with today’s global financial crisis is a bit dangerous, maybe it’s better to save money in the bank and hope that they will not go bankrupt.
Get Dave Ramsey’s Book ,”A Total Money Makeover.” Follow the advice in it to the letter or stay destitute or at least unable to retire on any real income. I am not related to him nor do I work for him and there are a few things in the book that I just could not do because of some lock situations but its all there brothers and sisters just open your minds and force yourself to change those bad habits.
I really enjoyed this post and although it doesn’t apply to me so much (I did start my contributions in my 20s and am in a very good pension scheme) they are still useful. And you are very right about most of the advice being really ‘mainstream’ – start early, compound interest and the like.
Great tips, Emily! I want to add one: start a second stream of income: an online biz, MLM, Real Estate, freelancing writing, whatever fits you. That way you can live off your job income and sock away whatever you get from the other income.
Another way some have made money at home is making & installing hho generators to help people get much better mileage. You might be suprised at how hard this though-I’m amazed at how many people think that people CANNOT get better mpg-but I guess they believe ALL the news. Sometime we just have to KEEP ON TRYING till we find the right people. If you can afford it you could put ad in newspapers that you CAN help people get much better mpg-call (your #) for details. Details on MANY ways to get much better mpg at: http://double-mileage.blogspot.com.
VERY GOOD suggestions! Also, why not do organic gardening in your back yard(if you have one), &/or container gardening?