According to a study by the U.S. Federal Reserve, 26% of Americans aged 30-44 and 17% of people aged 45-59 have no retirement savings. If you haven’t started saving for retirement yet, you are not alone. The best thing you can do to prepare for your future is to begin saving now. Here are some tips to help you start making up for lost time.

How Much Do I Need to Retire?

Figuring out how much to save for retirement is different for everyone, especially when you’re mapping out a late retirement planning strategy. It depends on where you live, your housing situation, debts, etc. Most financial advisors agree that you should draw no more than 3-4% of your retirement portfolio each year. Creating a plan with this in mind will help you set your target savings amount. For example, if you plan to live off $30,000-$40,000 each year, you should have $1 million saved before retiring. When you make your plan, don’t forget to account for unexpected expenses.

How Do I Get There?

Have a Plan

Fundamental to saving for retirement later in life is having a plan that you stick to. This includes creating a budget that outlines an aggressive savings plan you adhere to each month. Your retirement plan should also include delaying taking social security until after 70 if possible, as this greatly increases your payment amounts.

You should also consider what you might do if you reach a certain age (such as 60) and aren’t on track to meet your goal. Catching up on making contributions to your retirement plan later in life might have to mean making some sacrifices. This could include things like downsizing your living situation, working longer than you had originally planned, or phasing into retirement with reduced hours or a part-time job.

Save, Save, Save!

You should put as much into your retirement accounts as possible; max out your contributions to your 401(k) and open an IRA. If you’re 50 or older, you can make additional “catch up” contributions — an extra $1,000 each year for traditional or Roth IRAs and an extra $5,500 per year for 401(k), 403(b) and 457 plans.

Align Your Risk With Your Timeline

While higher returns may be tempting, don’t take on extra risk to try to make up for years you’ve missed. You don’t have the time to recover from a significant loss like someone in their 20’s or early 30’s. Align your risk with your age and retirement goals and regularly rebalance your portfolio to ensure reality matches your plans. Older individuals looking to reduce risk but who also want to keep investing should look into bonds as a more risk-averse strategy.

Protect Yourself From Financial Crises

One financial hardship could wipe out a huge portion of your retirement savings. Ensuring you have adequate health, disability, homeowners and car insurance can help protect your retirement savings. Consider a health savings account and long-term care insurance to prepare for anything you may need in retirement.  

Pay Off High-interest Debt Quickly

The interest that you pay on high-interest debt (like credit cards) adds up quickly. Focus on paying off as much of your debt as possible before entering your retirement years. When you can, pay the minimum on all low-interest debt (like mortgages, car loans and student loans) and as much as you can toward high-interest debt. When that high-interest debt is paid off, you can allocate that money to expanding your investment portfolio.

Prioritize Your Savings

Don’t stop saving for retirement to pay for college expenses — there are loans and assistance programs available for students but not for retirees. Being financially secure in retirement is a great way for you to help your children and grandchildren in the long-term. When you’re starting retirement savings later in life, you should prioritize your fund — once that is secure, then you can focus on your children and grandchildren.

Meet With a Financial Planner

The best thing you can do is meet with a financial planner. They can explain your options and help you create a personalized plan to achieve your goals. Connect with a Farm Bureau financial advisor to begin preparing for your future.