What to Do If You’re 60 Without Retirement Savings

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If you’re 60 or even in your 50s and don’t have much saved for retirement, you’re not alone. In 2022, 27 percent of people between 55 and 67 had less than $10,000 saved. At the same time, 40 percent had under $50,000 for retirement.

The goal for many of these people is to catch up. But that can seem like a daunting task. What do you do if you’re 60 without retirement savings, and how much do you really need?

Take Inventory of Financial Situation

Where are you now, and where are you going? Forty-four percent of baby boomers say they “guessed” their retirement savings needs. They didn’t calculate with real numbers what they would need.

Fidelity Investments experts say that by 67, you should have saved 10 times your income. That means you should, in theory, have $565,240 saved by your 67th birthday. This is based on the Bureau of Labor Statistics average earnings of a person 55 or older who made $56,524.

Analyze your assets. What do you have now, and what assets will be available in 10 years?

Use this free retirement tool from Vanguard to help determine what you need based on what you currently have.

Know Your Numbers

When you made a small salary, you probably lived paycheck to paycheck. But it’s incredible how people who have large salaries also live paycheck to paycheck. The more people earn, the more they spend.

Take a hard look at your finances. Conduct a spending audit and determine where your monthly income goes each month. You can do this on a piece of paper or an Excel sheet. There are also budgeting apps available through iOS and Android.

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Budgets aren’t the most exciting mechanism, but they’re vital if you want to know what you truly need and what is just fluff or wants.

Cutting back on excess spending could provide the money you need for your retirement fund.

Part of knowing your income versus expenses is closely analyzing your debt. Americans hold more than $1 trillion in credit card debt.

Your credit card debt, with its high interest rates, keeps you from saving for retirement. It’s wise to pay down credit card debt as quickly as possible.

There are many ways to pay down credit cards. Start with putting extra money toward the card with the lowest balances to eliminate them first. Then, tackle the largest card. But the number one step to help you is to quit using them. Make it a point to purchase only items that you have enough on your debit card to afford.

Suppose you’re an empty nester living in a large house. It may be time to downsize. This will save on your mortgage and maintenance costs.

Plan to Work Longer

Keep in mind that people are living longer. Seventy is the new 60. So that means if you are 60, you have 10 years left in your career. You have one large item on your side to help achieve a retirement nest egg. You can earn an income. You have earning power.

When looking at your assets, don’t discount your income. The ability to earn income is your greatest asset. And you have at least ten more years to add to your retirement using this asset.

You can earn more by working longer. You could also start a side gig—anything you can do to bring more income into your household.

Make sure you remain relevant to your job. If you want a side hustle, educate yourself. One side hustle that many older people gravitate to is driving for ride sharing companies.

Determine Retirement Strategy

It’s time to seriously consider establishing a retirement strategy. If you don’t participate in your employer’s 401(k), it’s not too late. Enroll and then contribute the maximum yearly amount.

If you’re self-employed or don’t have access to a 401(k) plan, investigate options like an annuity or a Roth IRA. Meet with a financial advisor to make a retirement plan based on your current situation and where you want to be.

Delay Social Security Benefits

If you’re grappling with building a retirement fund, consider delaying Social Security. By doing this, you can increase your benefits.

For example, the longer you work, the more you pay into Social Security. This allows you to qualify for a larger monthly payment.

The amount you receive will also increase the longer you wait to collect benefits.

Remember, if you collect Social Security before you have reached full retirement age, you will be limited as to how much additional income you can earn.

Don’t Overlook HECM

Don’t overlook a home equity conversion strategy (HECM). These are federally insured. However, there are several other types of reverse mortgages available.

For example, a proprietary reverse mortgage is backed by private lenders and a single-purpose reverse mortgage is offered by state, local and nonprofit agencies. Each has its pros and cons.

It’s Never Too Late to Save for Retirement

Because of Social Security’s tenuous future, retirement savings is essential. If you’re 60, it’s not too late. Consider working longer. You still have a solid 10 years or more of work life left. And if you have a hobby or interest, think about turning it into a side hustle.

Pay down your debt so you’ll have more income for retirement. Those interest on credit cards will erode your retirement fast.

But most importantly, look at what you have and establish a strategy. Meet with a financial advisor and plan your future.

The Epoch Times copyright © 2023. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.