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3 Things to Do if You're in Your 50s With No Retirement Savings

By Maurie Backman – Mar 10, 2019 at 6:18AM

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It's not the best situation to land in -- but it is fixable.

There's a reason we're supposed to save independently for retirement: Most seniors need 70% to 80% of their previous income to live comfortably, and Social Security will only provide about half of that for average earners. Without savings, it's pretty tough to fill that gap.

How much savings should you be aiming for? Retirement costs the average American $46,000 a year, but you might need more or less money depending on your expenses and the lifestyle you want to uphold. Social Security, meanwhile, only pays the average senior today about $17,500 a year, so if that's the sort of benefit you're looking at and you have no savings at present, you're facing quite the gap.

Middle-aged man wearing glasses and black sweatshirt with serious expression


Now if you're in your 20s, 30s, or even 40s, you have a decent window of time to start setting aside some cash for retirement. But if you're already in your 50s, that window is much narrower. Here's what to do if you're facing the latter scenario and want to salvage your golden years.

1. Don't panic

I'm not going to lie -- being in your 50s with no money set aside for the future isn't a great spot to be in, but it's also not totally dire. So rather than panic or resign yourself to an impoverished retirement, make immediate changes that free up cash in your budget. You might downsize your living space, go from a two-car family to a single vehicle, or cut back on luxuries like restaurant meals and non-work clothing. If you're able to free up $500 a month over the next 15 years to save, and your investments generate an average annual 7% return, you'll accumulate about $150,000.

Is that a huge amount of savings to enter retirement with? Honestly, no. But it's better than nothing, and it's a good starting point to aim for.

2. Get a side hustle

You can only cut back on so many living expenses before making yourself miserable. You might make a few meaningful changes that free up several hundred dollars a month, but if you're in your 50s with no savings to show for, you'll need to do better than that.

Enter the side hustle. The beauty of getting a second gig on top of your primary job is that the money you earn from it won't be earmarked for existing expenses, thereby giving you the option to save all of it. In fact, of the millions of Americans who have a side hustle, 14% do so for the express purpose of building retirement savings.

Imagine you're able to bring home $500 a month on top of the $500 you free up by cutting expenses. If you save $1,000 a month for 15 years at an average annual 7% return, you'll have just over $300,000 for retirement. Suddenly, things are looking a lot more promising, aren't they?

3. Make plans to work a bit longer

It's hard to push yourself to stay in the workforce when you've been banking on retiring at a certain age. But extending your career can work wonders for your retirement in several ways. First, if you're able to delay your Social Security benefits past your full retirement age (67 for anyone born in 1960 or later), you'll boost them by 8% a year up until age 70. And that's a good way to compensate for a low savings balance.

Working longer will also afford you an added opportunity to contribute to your retirement plan. Let's imagine that you're saving $1,000 a month, only instead of doing so for 15 years, you do so for 20 years. Suddenly, you're looking at a nest egg of nearly $500,000, assuming the 7% return we've been looking at all along. Now that's a nice chunk of cash.

Remember, Americans are living longer these days, with one in four 65-year-olds expected to live past 90. Extending your career, therefore, won't necessarily leave you without a retirement, but it will give you more money with which to enjoy your golden years once you kick them off.

The last thing you want to do is retire short on cash and struggle as a senior. If you're in your 50s with no retirement savings, pledge to do better effective immediately. The longer you wait, the more you ultimately put your golden years at risk.

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