It's not a secret that a large percentage of working Americans are behind on retirement savings. In fact, the typical worker aged 32 to 61 has an average savings of just $95,776, and while that's not necessarily terrible for someone in his or her early 30s, if you're at or pushing 60, it's a definite problem.

Now to be fair, this number improves a bit among older working Americans -- those aged 50 to 55 have an average of $124,831 socked away, while those aged 56 to 61 have a $163,577 nest egg, on average. Still, even with Social Security thrown into the mix, that's not nearly enough to sustain the typical senior, especially since as per the latest projections, the average healthy 65-year-old today will spend $200,000 or more on healthcare in retirement alone.

Smiling older man


If you're among the countless Americans who are late to the retirement savings game, the good news is that you do have several options for catching up. Here are just a few to consider.

1. Work a side gig

It's not just poor millennials who are moonlighting in their spare time to bank an extra buck or two. An estimated 44 million Americans currently hold down a side job, and of those who do, 36% bring home $500 or more per month. Not only that, but older folks who take on a second job are more likely to make an additional $1,000 a month -- or more.

Now, let's be optimistic and assume you're able to bring in an extra $1,000 a month for a full year and save it for retirement. If you then invest that money for 15 years and earn an average yearly 6% return, you'll grow it into $24,000, which will be a nice way to pad your nest egg.

2. Extend your career

A good 70% of Americans plan to work as long as they can, or so says a Bankrate study released last year. If you're behind on retirement savings, one of the best things you can do to catch up is to put in a few more years on the job. This way, you'll not only bank some additional income, but avoiding dipping into your limited savings for longer.

Currently, workers 50 and over can contribute up to $24,000 a year to a 401(k). Let's say that instead of retiring at 67, you work until age 70 and max out your 401(k) during that time. Even with zero investment growth, you'll snag an additional $72,000 for retirement.

3. Unload some unnecessary expenses

We all need a roof over our heads, a means of transportation, and some sort of food on the table. That said, there are ways to achieve these necessary objectives without spending a fortune. If you're currently forking over a huge chunk of your income to cover your basic living expenses, slashing those costs could free up loads more cash for retirement.

Let's start with housing. If you're paying $2,000 a month at present for the privilege of living in a luxury building that comes with a great location, swapping that space for no-frills apartment three blocks over might put $600 a month back in your pocket. Save and invest that money at a relatively conservative 6% average annual return for 10 years, and you'll add $95,000 to your nest egg.

Then there's transportation. It costs the typical American $725 a month to own a vehicle. If your car is more of a "want" than an actual "need," and you're able to get around town using buses, trains, and taxis at a cost of just $300 a month, you'll have an extra $5,100 a year to stick in your IRA or 401(k).

Finally, there's food. In 2015, the average American household spent roughly $3,000 on meals prepared outside the home, but since restaurants typically charge a 300% markup, those who spent that much shelled out a good $2,000 more than necessary. If your weekly takeout order costs you $30 and you start cooking that extra meal instead, you'll save $20 a week, or over $1,000 a year, and that's money that can go right into your retirement account.

Of course, housing, transportation, and food are only some of the expenses you'll encounter as part of your day-to-day existence. If you look closely, you'll probably manage to pinpoint additional savings opportunities, such as canceling that gym membership you rarely use or downgrading to a less extensive cable plan. And every dollar you save by being more judicious and frugal is money that will help you compensate for being behind on savings.

No matter your age, it's never too late to catch up on retirement savings. And the sooner you start, the better positioned you'll be once it's time to begin tapping that nest egg.


The Motley Fool has a disclosure policy.