15 Ways to Start Saving for Retirement at Any Age

Saving for retirement is crucial to your financial well-being. You generally can't live on Social Security benefits alone, so you must have a nest egg to help support you.

The sooner you start working on building your retirement investment account, the easier it is to save the money you need for your future. So no matter how old you are, if you haven't started saving for retirement, now is the time to begin.

Not sure how? Just follow these 15 steps to get your money working for you to help you build a brighter future in your later years.

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It's important to get a realistic picture of how much you need to save for retirement. To do that, you need to think about all of the costs that you'll have to cover.

This includes your routine expenses, such as food and housing. But you also can't forget about healthcare costs. The average senior couple turning 65 this year could face out-of-pocket medical costs of around $300,000.

By getting an idea of how much income you'll need to produce, you can make a plan for how large your nest egg needs to be.

Your retirement savings will be a key source of income, but probably not the only one. You will likely also be able to rely on Social Security and perhaps even a pension from your employer.

It's helpful to get an idea of what other income sources you'll have so you can more accurately estimate your retirement savings goals. Sign into your online Social Security account to see your likely future benefits, and ask your employer if any pension funds will be available.

ALSO READ: Here's the Maximum Social Security Benefit in 2021

Your desired retirement age will affect how long you have to save, how much you need to save, and perhaps how much your Social Security checks are if you're planning on claiming them upon leaving the workforce.

Consider your financial situation and personal goals and set a target retirement age to guide you in deciding the amount you need to invest for your future.

Once you know what amount of income you'll need your savings to produce, you can estimate the amount that you actually need to have invested.

If you plan to follow the 4% rule and withdraw 4% of your account balance in your first year of retirement, you can do this by multiplying your desired retirement income amount by 25. So, if you estimated you'll need your savings to produce $25,000 in retirement income, you'd know you need a savings account balance of $625,000.

The 4% rule is an easy way to set a retirement withdrawal strategy that reduces the chances you'll run short of money in your later years. If you have a different plan for withdrawals, this approach can still give you a rough idea of how large your nest egg should be -- although it won't be as accurate.

Knowing how much you need to end up with is a good start, but you need to translate that number into an immediate action plan.

That means you should use a retirement savings calculator to see how much to invest each month to have your desired nest egg by your preferred retirement age.

Investor.gov has a good calculator you can use to set a monthly target. If your goal is to save $625,000 by the time you retire in 20 years, the calculator would show that you need to save about $1,138 per month -- assuming you earn an average 8% annual return.

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Next, you must decide where to put your retirement money. And the good news is, there are plenty of accounts that provide you with tax benefits for saving.

You can choose a Roth account if you want to contribute with after-tax dollars but take your money out tax-free as a retiree. Or you can choose a traditional account if you'd rather make pre-tax contributions but owe taxes as a senior.

A lot depends whether you think your tax rate will be higher later than it is now.

ALSO READ: Roth IRA or Traditional IRA: Which One Is Right for You?

Tax-advantaged retirement accounts have annual contribution limits. For example, in 2021, you can contribute up to $19,500 to your 401(k) (not including any money your employer puts in). If you are over 50, you're allowed to make an additional $6,500 catch-up contribution.

Most IRAs have lower contribution limits, except those for self-employed workers. Be sure to research whatever account you've chosen, in order to understand both the maximum tax-advantaged contribution and whether income limits or other restrictions apply.

In addition to the tax benefits that can come from investing in a traditional or Roth retirement account, you may also get some extra help from Uncle Sam in other ways.

For example, some people qualify for the Savers Credit, which could provide a tax credit valued at up to $2,000 if you make retirement account contributions. You don't want to pass up this free money if you're eligible for it.

ALSO READ: This Secret Saver's Tax Credit Gets More Attractive in 2021

If you have a company 401(k), your employer may provide matching contributions. That would mean they would contribute some money when you do.

The rules for matching contributions vary by company. Your employer may match 50% or 100% of your contributions up to a certain percentage of your salary or may do something else entirely.

Make sure you know what the rules are at your place of work so you don't pass up free money from your company to help you save for retirement.

If you want to hit your retirement savings goals, you need to treat your contribution as a must-pay bill. Since you know how much you need to save, build your budget around it.

If you find you can't cover essential expenses and still hit your retirement savings target, you may need to either adjust your expectations for retirement, find a side gig to bring in extra income, or make big changes such as moving or getting a cheaper car.

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Once you've reworked your budget and are certain you can afford to make your desired retirement savings contributions, it's time to automate the investing process.

Sign up to have 401(k) contributions taken from every paycheck if you'll be investing at your workplace. Or set up automatic contributions from your bank to your brokerage account on payday.

If you make the process of investing for retirement automatic, your money will actually get where it needs to go every month. There's no guarantee of this happening if you have to manually invest.

Although you should set regular contributions to your retirement accounts, there's nothing wrong with putting a little extra money away -- especially if you're late with getting started or if your target retirement date is further away than you'd prefer.

If you get a bonus at work or a big tax refund, you can arrange to put this surprise cash right into retirement savings to help make your nest egg bigger.

It's crucial that you don't take on too much or too little risk with your retirement savings. Otherwise, you might not earn the returns you need or you may lose your money and end up with too little for your future.

The right mix of investments is determined based on how old you are and when you'll need the money.

A good rule of thumb is to subtract your age from 110 to determine what percent of your money should be in the stock market. But you could also devise a more personalized approach if you'd prefer.

ALSO READ: 5 Things to Know About Asset Allocation

You also need to decide what specific investments you want to buy. You may have very limited options if you're investing in a 401(k), but can invest in just about anything with most IRAs held at brokerage firms.

Be sure to research your investment picks carefully, regardless of whether you're picking individual stocks, mutual funds, or exchange-traded funds.

Look at their long-term prospects, the risks, and the fees (if applicable) so you can find assets that provide the best chance of earning a reasonable return without outsize losses.

Finally, you should keep track of how your investments are performing and whether you're on target to meet your goals.

If you aren't, then you'll need to go back to the drawing board and make a different plan for building a secure future.

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While it's best to start early on saving for retirement, not everyone is able to do that. And no matter how old you are, you can still take steps toward improving your financial security in your later years.

Start implementing these 15 steps today so you can make sure you have as much money as possible when the time comes for you to leave the working world behind.

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