Do you feel like you don’t have enough saved for retirement? This can be a scary thought, especially if you are getting closer to retirement age. If you waited too long to start saving for retirement, you are not alone. One survey from Transamerica shows that 81% of Baby Boomers waited longer than is suggested to start saving for retirement.
Just because you started later than you should have doesn’t mean that it is too later. If you are approaching retirement, but you don’t yet have the nest egg you need, it may be time to kick your retirement savings into overdrive. Jean Setzfand, AARP’s retirement planning expert, offers some retirement planning advice for those who are quickly approaching retirement age and need to catch up.
Have you saved enough to support yourself in retirement?
Catch Up Contributions
There is one positive benefit of amplifying your retirement savings after turning 50. The government makes it easier for you to catch up on your savings by allowing you to put extra money into your employer-sponsored retirement accounts and your IRA.
Tax laws allow you to contribute $5,500 more than the typical $17,000 annual limit on retirement plans at work, like the 401(k), 403(b) and 457(b). This translates to $22,500 pretax dollars that you are able to save each year between age 50 and the day that you retire. You are also able to contribute an extra $1,000 a year to your IRA.
Building a nest egg is important to living comfortably in retirement.
More Retirement Tips from Jean Setzfand
Setzfand makes the point that all of your retirement saving efforts are only as good as your ability to make smart decisions with your investment portfolio before and after retirement. She offers the following helpful investment tips to apply to your 401(k):
• Diversify your investments. By putting your money into different classes of investments, you won’t be in trouble if one of your investments is down.
• Don’t put all of your money into the safe option. It’s important to take a little risk. Remember, that you are losing money if the return is less than the inflation rate.
• Check out automatic options. Life-cycle or target-date retirement funds use the appropriate level of risk for your age to automatically select a diverse set of investments that you can “set and forget.”
• Remember the fees. Even management fees that are a small percentage can translate to large sums of money over time, which will be subtracted from your retirement account.
• Monitor your investments. Read the account statements regularly and consider making changes when you see that a particular investment is not doing well.
• Plan to live a long life. If you are afraid of outliving your finances, consider purchasing annuities, which provide a guaranteed monthly income for life, even when the market is down.
The secret to a successful retirement is planning ahead.
Use the above strategies to catch up and get closer to your retirement savings goals. Though you may feel the pressure to already have a sizeable nest egg, it is never too late to kick start your saving for retirement. By extending your work years and supplementing your social security payments with other streams of income, you will be in much better shape. 
