I'm 50 and I Haven't Started Funding My IRA. Is My Retirement in Trouble?

At this point, it's time to get serious about retirement savings.

Seniors who retire on Social Security alone often struggle financially. Those benefits are only designed to replace a small portion of your paycheck. If you want to live comfortably as a retiree, you'll need to amass some savings. 

By age 50, you should, ideally, have a decent amount of money saved up in your IRA account. But what if that's not the case? 

Many people struggle to save for retirement at different stages of life for various reasons. Your 20s may have been plagued by credit card debt you struggled to shed. You may have spent your 30s scrambling to cover your mortgage payments while paying for childcare. And you may have been more focused on building college savings for your kids in your 40s than funding your own retirement nest egg.

If you've reached the age of 50 without having put any money into your IRA, then let's be real -- that's not a great situation. But that doesn't mean it's not a salvageable one. 

How much should you have in your IRA by age 50?

Fidelity says that by age 50, you should aim to have six times your annual salary socked away for retirement. So if you earn $80,000 a year, that means you'd ideally be looking at an IRA balance of $480,000. If your balance is $0, well, there's really no way to sugarcoat it -- it's a far cry from where you probably want to be.

But the good news is that being 50 means you still probably have a nice chunk of time left in the workforce. And if you make the decision to prioritize your retirement savings, you'll have a nice opportunity to catch up.

As such, take a look at your expenses and commit to slashing a few of them. This doesn't necessarily mean you should sell your home, uproot your family, and downsize while you still have teenage kids living at home. But what you may want to do is trade in your car for one that's less expensive, dine out once a month rather than twice a week, and cancel any services or subscriptions you can manage to do without, whether it's a gym membership or a meal kit delivery. 

At the same time, you may have to come to terms with the idea of getting a second job to catch up on IRA contributions. If you're 50 with no savings for retirement whatsoever, you'll really want to do your best to max out. And a second job might enable you to do that so you're not forced to change your lifestyle too drastically. 

This year, IRAs max out at $7,500 for workers ages 50 and over. Let's assume this limit doesn't change from this point onward, and you max out your IRA for the next 15 years. If you also manage to invest your IRA at an 8% average annual return, which is a bit below the stock market's average, as measured by the S&P 500 index, you'll end up with almost $204,000. And if you're willing to work and save until age 70, you'll be looking at a balance of around $343,000.

It's time to buckle down

If you've yet to fund your IRA thus far, don't beat yourself up. You're by no means the only person who's 50 years old without money set aside for retirement, and you may have fallen on some hard times throughout adulthood that made funding an IRA difficult. 

But at this point, it's important that you prioritize your IRA contributions, even if it means taking on a second job or cutting back on spending. If you don't bring some savings with you into retirement, you might struggle to cover even your basic expenses. And that's not a lifestyle you want.