The phrase, "It's better to be proactive than reactive" applies to many aspects of life, including personal finances. This is especially true for retirement planning because setting up a secure retirement isn't something that can happen overnight for most people.
That said, life happens, and we're not always able to save and invest as consistently as we'd like. That alone can be discouraging, but it's even more frustrating if you feel as though you're falling behind your peers.
If you find yourself in that situation, here are three practical things you can do to help you play catch-up and get back on track.
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1. Use a Roth IRA if you're eligible
Retirement accounts, such as 401(k)s and 403(b)s, are very helpful for retirement savings, but not everyone has access to them because they're typically offered through employers. However, retirement accounts like IRAs can be opened independently, like a standard bank account or brokerage account.
If you feel like you're behind on retirement savings, using a Roth IRA could help provide a boost. A Roth IRA has a unique tax break: You contribute after-tax money and then get to take tax-free withdrawals in retirement, as long as you're 59 1/2 years old and made your first contribution at least five years prior.
Having the chance for your investments to grow tax-free can be a financial cheat code that saves retirees thousands.
For example, let's imagine you invest $500 monthly and average 10% annual returns for 20 years. At the end of that period, you'd have around $343,000, with $223,000 being capital gains. Doing so in a Roth IRA means that all $343,000 would be yours tax-free. Doing so in a standard brokerage account means you'd owe taxes on the $223,000 in capital gains.
The downside to Roth IRAs is the income limit for eligibility. For 2025, the most you can earn and still be eligible to contribute to a Roth IRA is $165,000 for single filers and $246,000 for married folks filing jointly.
2. Take advantage of dividend stocks and reinvest payouts
Having growth stocks in your portfolio can be great, but their value comes from stock price appreciation. With dividend stocks, you'll receive value (read: money), regardless of how the stock price is performing.
Dividend payouts are nice, but a trick to maximizing their value is using a dividend reinvestment plan (DRIP). When you elect into a DRIP, your brokerage platform takes the dividends you're paid and uses them to buy more shares of the company or fund that paid them out.
For example, if you own 100 Coca-Cola shares and its quarterly dividend is $0.50, instead of receiving $50 in cash, you'll receive $50 worth of Coca-Cola shares. Those are additional shares that can appreciate in price and earn dividends -- a win-win.
Using a DRIP can help accelerate your growth by increasing the number of shares you own. Ideally, you'll keep doing this until retirement and then begin taking your dividends as cash payouts after you've built up your share count.
3. Delay claiming Social Security as late as possible
There are two parts to determining your monthly Social Security benefit: your career earnings and when you claim benefits. Most workers have little say in their earnings, but many have the option to delay claiming Social Security until a later age.
In Social Security, your full retirement age (FRA) is when you're eligible to receive your base monthly benefit, called your primary insurance amount (PIA). However, you can claim before or after this age, decreasing or increasing your monthly benefit, respectively.
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Delaying benefits past your FRA increases them by 2/3 of 1% monthly (8% annually), until you reach age 70. After you turn 70, benefits are no longer increased, so that should be the latest anyone claims benefits.
An 8% benefit increase per year may not seem like much, but delaying benefits until 70 could boost your monthly amount noticeably.
As an example, let's assume your FRA is 67 and PIA is $2,000 (the average benefit amount as of April 2025). If you were to claim benefits at 62, the monthly amount would be decreased by 30% to $1,400. By claiming at 70, it would be increased by 24% to $2,480. That's a $1,000 difference that could go a long way in retirement.
Delaying benefits until 70 may not be an option for those who need the income sooner, but if you're able to, it could pay off on the back end.
