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Life comes at you fast.

One day, you’re 20 years old with a bright future ahead of you.

Next thing you know, you’re 50 and realize you’re not saving enough for retirement.

Hey, don’t be embarrassed — tt happens to a lot of us. Only about 60% of Americans are confident they’re saving enough to retire comfortably, according to a recent Capital One survey. And that figure has gone down 10% in just two years.

It’s never too late to boost your retirement savings. But you shouldn’t put it off any longer.

“Fifty is a pivotal age,” says Ryan McPherson, founder of Intelligent Worth, a financial planning firm in Atlanta. “You’re 10 to 15 years away from retirement and still have enough time to make major changes if needed.”

So what should you do if you’re in your 50s and your 401(k) account isn’t up to par? We asked a bunch of professional financial planners.

Here’s what they told us:

1. Sock Away More, Get Free Money

For starters, you absolutely, definitely need to take full advantage of your employer’s matching contribution to your 401(k) plan.

“Take advantage of your full company match,” says Jeff Dixson, a financial adviser in Vancouver, Washington, who hosts a radio show called the Retirement Coach. “If they match 3%, contribute 3%. If they match 6%, try to get to 6%. That’s free money. There’s nowhere else you’re going to get free money.

2. Catch Up After 50

Individuals who are age 50 or over at the end of the calendar year can make annual catch-up contributions,” says David McCormick-Goodhart, a financial adviser with Savant Capital Management in McLean, Virginia.

In 2018, the federal government will raise the personal 401(k) contribution max from $18,000 to $18,500 annually. People in their 50s and 60s can contribute an extra $6,000 per year — if they’re able to.

3. Make a Plan, Man

Sit down with someone who specializes in retirement income planning, suggests Dixson, the financial adviser in Vancouver, Washington.

“The whole point of saving for retirement in the first place is to build a nest egg that you can eventually turn into consistent monthly income,” he says. “Wouldn’t it make sense to figure out how much you actually need to save rather than winging it?”

4. Reevaluate Your Spending

Write down everything you spend money on — and how much you spend.

“Circle the discretionary items that bring you the most joy,” says McPherson, the Atlanta financial planner. “Next, circle the ones you could do without. Holding your income constant, something must be cut for you to save more.”

5. Don’t Be Too Conservative

People tend to get more conservative with their 401(k) as they age, putting more of their savings in bonds instead of stocks. And that makes sense. Stocks will generally give you a higher return than bonds, but they’re also more volatile and can suddenly drop in value.

Don’t get too conservative, though.

Robert Johnson, president of the American College of Financial Services in Bryn Mawr, Pennsylvania, recommends embracing the risk of the stock market well into your 50s.

Since 1926, the average annual return is 10% for stocks, 6% for bonds and 3% for cash, he says.

“Investors in their 50s may not feel that their time horizon is long enough to invest in stocks, and that is a mistake,” Johnson says. “Having a significant allocation to stocks is advisable for most individuals in their 50s.”

6. Don’t Get Too Risky, Either

Don’t go crazy, though. Don’t get overly aggressive with stocks.

“One of the biggest mistakes I see people in their 50s who are behind on their retirement savings making is trying to play catch-up by taking on additional risk to make up for lost time,” says Desmond Henry, founder of Afflora Financial Life Planning in Topeka, Kansas. “Sure, the potential for higher returns is there, but so is the potential for loss.”

7. Get a Side Gig

“You’ll want to consider developing a second stream of income,” says Nathan Garcia, a financial planner with Strategic Wealth Partners in Fulton, Maryland.

“This income could be as little as $1,000 per month. However, that surplus could be beneficial for replacing income that is now being diverted into your 401(k). There are also significant tax advantages available to business owners, allowing them to write off ordinary expenses such as a cell phone, internet, transportation, etc.”

Need some ideas? Here are Penny Hoarder articles on “14 Leisurely Ways for Retirees to Make Extra Money in Their Spare Time” and “Awesome Ways Retirees Can Work From Home and Make Extra Cash.”

8. Watch Out For Hidden 401(k) Fees

Sadly, very few investors ever understand how much hidden fees are eroding their retirement nest egg,” says Chris Costello, CEO and Co-Founder of Blooom. The app will sniff out your hidden fees for you.

“An easy way to combat this is to use as many of the index fund offerings that might be available within your 401(k) plan,” Costello says. “These tend to have hidden fees that are a fraction of what actively managed funds are charging.”

Blooom will optimize and monitor your 401(k) for you. It’s a great way to find out if you’re overpaying on fees and have the appropriate amount invested in stocks versus bonds.

9. Be Prepared for Hard Choices

“Most people don’t start seriously saving until their kids are out college. Until then, retirement doesn’t seem real,” says Garcia, the Maryland financial planner.

“If your kids are still in college, consider allowing them to pay for their education with student loans so you can divert savings to your retirement. There are loans for college. There are none for retirement.”

Frightened yet?

It’s OK. It’ll be OK.

You still have time to turn things around if you set your mind to it.

Remember the bottom line:

“If you’re not willing to save more or decrease your desired standard of living in retirement,” says Dixson, “you’ll be forced to work longer.”

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He does not have enough saved for retirement.

Did this article help put money in your pocket?
Honest Abe


Some of the links in this post are from our sponsors. We’re letting you know because it’s what Honest Abe would do. After all, he is on our favorite coin.