If you are behind on retirement saving, you’re not alone. Roughly 25 percent of workers say they have less than $1,000 saved, and about 50 percent put the figure at under $25,000. You should be on track to have six to nine times your annual salary in your retirement nest egg by the time you’re in your early 60s. If you’re not, you need to start plotting ways to catch up.

A couple who is behind on retirement.

Start Now

You should act immediately to begin the process of making up lost ground. The good news is that saving for retirement is not a sprint; it’s a marathon.

Many people don’t realize they are behind until they are only a few years away from retirement. No matter how far along you are, there are things you can do to recover. Start now!

Ramp Up Savings

Be realistic about how much you can put into retirement savings. You can’t save half your salary, but you can likely save more than 5 or 6 percent. A much better goal is 15 to 20 percent. If you plan to work part time in retirement, the percentage required would be less.

Maximize contributions to your 401(k) up to at least the company match. If you have at least five years before you will need the funds, opening a Roth IRA will bring you eventual tax-free distribution of both contributions and earnings.

Increase Income

Ask for a raise, work extra hours or follow the time-honored tradition of moonlighting at a part-time job after hours. Other additional income options include everything from a garage sale to investing in real estate. A rental property could provide additional retirement savings or supplemental retirement income to slow down the depletion of your nest egg.

Work Longer

Delaying retirement for a few years may make sense for you. In addition to adding to savings, every year you work past the age of full retirement (65, 66 or 67, depending on when you were born) adds 8 percent to Social Security benefits—until age 70. The longer you wait to retire, the longer your nest egg will grow. The combination of more money saved, plus compound interest over a longer period, is hard to beat.

Change Jobs

If you are in a job that doesn’t offer either a pension or 401(k) with matching, seeking a job that does could be a smart move. Chances are you will move to a job you like at least as well that pays more, has better benefits and with which you are likely to stick longer—giving you more time to save and prepare for your eventual retirement.

Eliminate Debt

The interest you pay on debt could be working for you in retirement. Pay off high-interest-rate credit cards first, followed by other debt. Any monthly payment you can eliminate automatically becomes a potential source of more retirement savings. You might be surprised at how quickly it can add up.

Maximize Deductions

If you take the standard deduction on your income taxes each year, you may be missing out on additional savings that could be had by itemizing deductions, such as mortgage interest, real estate taxes, employee or business expenses and charitable donations. Save all receipts and keep good records to determine whether you are eligible for more deductions than you are taking.

Keep Your Lifestyle Modest

Instead of using a raise or bonus as an excuse to buy a new car or take a luxury vacation, invest the money in your retirement. Modest personal rewards are OK, but you should put most of any extra money toward your nest egg. This will help you catch up and reach your goals sooner rather than later.

Use Home Equity

Borrowing against the equity in your home, taking out a reverse mortgage or selling your home and downsizing to smaller, less-expensive quarters are all ideas worth considering for generating cash for your retirement.

If you want to keep your home, rent out a room for additional ongoing income that you can put into retirement savings. Taking on a boarder is an excellent idea, especially if you live in a college town. Or, if your town’s cost of living is high, first-year teachers or other young professionals priced out of local housing may also be a good source of roomers. Just make sure your town permits this.

Tap Into Cash-Value Policies

If you have a life insurance policy you no longer need, tapping into its cash value or selling it may be worth considering. Go over your plans with a trusted financial advisor to make sure this move makes sense for you.



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