Behind on your retirement savings? You're not alone. According to a 2016 survey by GOBankingRates, 23% of respondents said they have less than $10,000 saved for retirement, and roughly one-third said they have no savings at all.
People face plenty of obstacles when it comes to saving for retirement, making it easy to put it off until tomorrow -- until a few thousand "tomorrows" have passed, and suddenly you're just a few years away from retirement with next to nothing in your savings fund.
Even more disheartening is the fact that it costs more than ever to retire comfortably. Thirty-seven percent of workers say they believe they'll need at least $1 million to survive once they retire, according to an Employee Benefit Research Institute survey.
So what can you do if you're reaching the middle of your life with little to no retirement savings stashed away? Fortunately, with some smart investing tactics, it's still possible to reach your retirement goals -- and maybe even save $1 million -- if you've gotten off to a late start.
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Going big
Make no mistake: If you hope to have $1 million by the time you retire and you're just starting to save at age 50, you'll have to do some serious saving. You'll likely need to make sacrifices, such as cutting back on vacations, picking up a side job for extra income, or even downsizing to a less expensive home. Even then, saving up $1 million in such a short amount of time may not be possible if your household income is below six figures.
All that said, achieving a $1 million nest egg is attainable for disciplined savers with higher-than-average earnings. Even better, it doesn't involve investing in the next billion-dollar start-up or taking up day trading and hoping to make it big. Instead, all you need is a 401(k) and a willingness to invest in stocks, which carry higher risk than cash and bonds but offer much higher reward.
For 2017, the IRS allows investors aged 50 or older to contribute $24,000 to their 401(k) plans. Assuming that you contribute the full $24,000 each year, that you have no savings whatsoever to begin with at age 50, and that you'll see an average annual return of about 8%, here's where you'll end up in 10, 15, and 20 years:
| Age | Amount saved |
| 50 | $0 |
| 60 | $375,500 |
| 65 | $703,800 |
| 70 | $1,186,000 |
So it is possible to save $1 million if you're willing to work until age 70 and contribute at least $24,000 to your 401(k) each year. However, it's also important to keep in mind that these numbers are based on favorable market conditions, and if the market crashes or sees returns of less than 8%, it will be more difficult to reach that $1 million goal.
Other paths you can take
If you can't contribute $24,000 a year to your retirement fund, you're in good company. But that doesn't mean you can't push yourself to save more and grow your nest egg substantially.
Say, for instance, you can only save an extra $1,000 per month. Assuming, again, that you have no savings to begin with, your investments earn 8% per year, and you retire after 20 years of saving, you'll end up with about $572,700.
Perhaps even $1,000 a month is stretching you too thin. Say you instead choose to max out your IRA and contribute the full $6,500 allowed each year for individuals age 50 or older (which amounts to about $542 each month). That will leave with $310,400 after 20 years. While it's nowhere near $1 million, it's enough to make a huge difference in your financial security in retirement.
Those numbers also look pretty good in comparison to what other people are saving. According to a survey by the Government Accountability Office, among households aged 55 to 64, the median retirement account balance is $104,000, while the median for households aged 65 to 74 is $148,000. Over the course of a 25-year retirement, that won't even provide five figures' worth of annual income.
So even if you only manage to save $300,000 or so, you're still far ahead of the curve. To see whether that amount will last you through retirement, though, plug your numbers into a retirement calculator to see whether you've saved enough to afford your lifestyle.
Saving for retirement is hard, and it's far easier to put it off for another day. But it's always a good time to start saving, and you're never too old to start stashing money away for your golden years.
