How to catch up on retirement savings: Best age-based advice

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The pandemic has forced many Americans to take a closer look at their bank accounts, and one harsh reality has emerged for quite a few of them: They realize that they haven’t been putting away enough for their post-work years. According to Bankrate’s most recent Financial Security survey, 19 percent of Americans regret not saving for retirement early enough.

If you are trying to figure out how to catch up on retirement savings, your strategy — and how quickly you need to make major adjustments — will depend on your age and your goals for exiting the workforce.

Bankrate Insight
It’s never too late to start saving for your retirement (and of course, it’s never too early, either).

Your 20s: Put your plan in place

In your 20s, you’ll have a lot of startup expenses for life. You might be focused on buying a home, getting married or paying off your college debt. Even with those competing needs for your money, this is the time to take the most important step of making your retirement savings a regular routine.

Sign up for your workplace-based retirement plan and aim to set aside 10 percent of your income for retirement, taking full advantage of any matching opportunities from your employer. If you don’t invest enough to achieve the maximum company match you are, in effect, turning down free money.

If you don’t have access to a traditional 401(k), open an IRA (you can choose a traditional IRA and/or Roth IRA) and make regular monthly contributions via automatic investment from your checking account. While retirement might seem like another universe at this point, you’ll thank the younger version of yourself at a later date. To get an idea of how well you can position yourself in the long run, Bankrate’s Roth IRA Calculator can illustrate the growth potential of regular contributions.

Your 30s: Put your foot on the savings accelerator

So you didn’t start saving in your 20s? You’re not alone. Data from Nationwide suggests that the typical American actually starts saving for retirement at age 31.

If you’re starting now, that 10 percent figure should be closer to 15 percent of your income. As your income rises, you should work to keep increasing your retirement contributions. Plus, you likely have paid for some of the introductory expenses of your 20s, so you should be in a better position to save more money.

Your 40s: It’s time to get aggressive

If you’re just getting started, this is the time to knuckle down and focus on how to catch up on retirement savings. Open an IRA, and roll over any 401(k) plans from your previous employers. You should also take a long, hard look at your spending to identify where you can make some sacrifices.

At this point, if you’re behind in your retirement, you should sail past that 15 percent marker and try to designate an even bigger chunk of your income to your long-term cushion. Use Bankrate’s Retirement Savings Calculator to get a good estimate of how much you need to save in order to alleviate the stress of living on a fixed income.

In addition to being aggressive with how much you save, you will want to be fairly aggressive in how you invest those savings. With 20 to 30 years still left in the workforce, you should be tilted toward riskier investments such as the stock market in order to compound the higher rates of return over an extended period of time.

Your 50s: Play catch-up with your contributions

Hitting the half-century mark might sound daunting, but it does come with some good news: The opportunity to take advantage of bigger tax-advantaged contributions.

Currently, that means an extra $1,000 per year, starting in the calendar year you turn age 50, for traditional and Roth IRA plans. For a 401(k), 403(b) or 457 plan, you can set aside an extra $6,500 and enjoy the benefits of a lower tax liability. Just as you did in your 40s, you should regularly evaluate any ways to cut spending in order to save more for retirement.

Your 60s: Think about what’s next, and adjust accordingly

In your 60s, the question you need to address is focused less on how to catch up on retirement savings and more on how to recalibrate your expectations for retirement spending. If you’re behind in your savings, it’s time to start assessing the lifestyle you want and the living expenses you will pay after you stop working.

Make plans to delay your Social Security benefits until age 70; if you delay benefits, you’ll receive a larger benefit later on. Instead of relying on those government payments early, you will definitely need that higher income later. Depending on your situation, it may be wise to consider working longer or scaling back on your post-work lifestyle.

Remember: Retirement isn’t fully in your control

I’ve heard plenty of people in their 50s or 60s lament the fact that they are really far behind in saving. Instead of thinking about how to catch up for retirement, they assume there’s no hope and simply say they’ll work forever.

However, that is not realistic, and ultimately, it may not be up to you. Even if you love working, there are health care concerns that may derail your ability to continue in your current position. Your employer may decide it’s time for you to retire, too.

With that in mind, it’s important to know that it’s never too late to start saving for your retirement (and of course, it’s never too early, either). No matter how far behind you may think you are, it’s always a good time to outline plans to adjust your budget and allocate more money to make your golden years truly shine.

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Written by
Greg McBride, CFA
Chief financial analyst
Greg McBride, CFA, is Senior Vice President, Chief Financial Analyst, for He leads a team responsible for researching financial products, providing analysis, and advice on personal finance to a vast consumer audience.
Edited by
Senior editorial director
Reviewed by
Professor of finance, Creighton University