So, you wake up one morning and realize that you are 55 and you don’t have anything saved for retirement.  It happens more often than you might think.  Maybe college tuition has eaten up your nest egg, or maybe unexpected medical expenses, or a job loss or bad investments.  It doesn’t really matter how you ended up there, the important thing is to take action.

The first step is to estimate what you’ll need to live on in retirement.  You’ll need to estimate your expenses, as well as your sources of income.  There are plenty of tools available online to help.  Once you estimate those numbers you’ll have an idea of what you need to make up through your savings.

Next, start contributing as much into tax-advantaged retirement plans as you can.  Start by contributing as much as you can to any plan that provides a match for your contributions.  The first step is to make sure you are capturing all of those matching dollars.  Next, work on contributing the maximum to your employer plan, even if the savings are not matched.  This is a simple and often inexpensive way to automatically save for retirement.  Once you have reached that goal, consider traditional or Roth IRAs.

Next, put together a new budget.  Instead of leaving savings until the end, make it the very first number on the budget.  After that, write down your mortgage payment, other debts and other fixed expenses.  Only then add in your discretionary spending.

Once you have your new budget in place, consider your current work situation.  Could you be getting paid more somewhere else?  Could you find an employer with a better retirement plan?  Do you have an opportunity to work overtime, “moonlight” or take a second job?

Another choice might be to start a business on the side.  A hobby that you could turn into a money-making enterprise might be a terrific way to generate extra income.  You may be able to contribute significant amounts of self-employment income to a tax-deductible retirement plan.  Also, by this point in your career, you may have accumulated a high level of expertise in your field.  If that is the case, there might be opportunities for you to consult, write or otherwise share your knowledge and wisdom as a second job.

Be realistic about your retirement timeline.  If you had planned to retire at age 62 or even 65, you might have to move that back.  For people born after 1960, full retirement age for social security is 67, and benefits increase to age 70.  People are living longer, more active lives and many are working into their seventies.  You may also consider retiring gradually, moving from full-time to a few days a week or few hours per day.  This way you can keep active, and earning, but still enjoy some of the benefits of retirement such as more free time to spend with family or on the other things you want to do.

One thing you shouldn’t do is take on too much risk.  Sometimes, when people are behind in their savings goals, they will try to make up for lost time by making a big gain in the market.  Trying to force returns in this manner rarely works, and major losses can make your situation worse.

Whatever you do, don’t panic or give up.  No matter how old you are, there’s still time to make some decisions that will make for a better retirement.  Be realistic about your goals and timeframes.  There may be no “quick fix” but, but steadily working towards your goals will help.

To hear the podcast of the Smart Money Management radio show on this topic, or others, go to our website at alderferbergen.com.

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

Securities and financial planning offered through LPL Financial, a registered investment advisor.  Member FINRA/SIPC