Are you 50 or older with little or no retirement savings? If so, you’re one of millions. Even if you had the best intentions starting out, financial setbacks, medical issues, putting children through college and other commitments may have left you without the resources to save for your retirement. It’s not too late to increase your net worth at retirement. Here’s how:
Prepare for the Future
No need to kick yourself by thinking about what might have been. Now is the time to figure out where you stand and how to move forward. The U.S. Department of Labor offers several interactive tools, worksheets and retirement calculators on its website for people between the ages of 50 and 70. You can determine your current financial health; calculate savings, assets and liabilities; and get retirement projections to help you move forward.
Increase Your Savings
High-interest debt drains you financially. Work toward paying off your balances with the highest interest rates first. Make more than the minimum payments. As you pay off each card, put the freed-up funds toward the next debt until all are paid off.
An easy way to save is to automatically send a portion of your paycheck to an interest-earning savings account. You won’t miss what you don’t see.
Did you get a raise? Don’t spend it frivolously. Put the extra money into a savings account.
Instead of buying a cup of coffee every morning, buy one on Fridays only, as a special treat. Do you eat out once a week? Cut back to once or twice a month.
Can you save on utility bills? Lower the thermostat in the winter and wear extra layers to stay warm. Make sure lights are turned off. Is your refrigerator ancient? Check with your power company to see if they have a program in place to help you replace old appliances with new, energy-efficient models. Little savings add up in no time.
Freelance or Become an Entrepreneur
You can make up for lost time by working a second, part-time job and saving your paycheck. Perhaps you have specific expertise that could be turned into an income-producing activity. You never know—you could become a successful entrepreneur and work long after normal retirement age doing something you love.
Love Your Car, Keep Your Car
Cars are expensive. Buying a new car every year or two places an unnecessary drain on your finances. That brand-new car loses value as soon as you drive it off the lot. Instead, do some research to find a brand that makes reliable, high-quality cars. Then look for a used model in good shape. Many dealers now offer warranties on used cars as well as new, so take your time to shop around. Have a mechanic check the car before you buy. Keep the car maintained and use it until it has to be replaced.
Is It Time to Downsize?
Perhaps you still live in the same home you did when you raised your children. Do you really need a large, four-bedroom house now? If not, consider selling and downsizing to a smaller home.
Some of these tips are fairly easy to follow while others prove more difficult, but they should give you hope that it’s never too late to increase your net worth for retirement, even if you’re almost there.