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It's Not Too Late to Save for Retirement

Don't wait to get started

By NIH/National Institute on Aging

Developing a retirement-saving plan might seem challenging or time-consuming. You might wonder, “How can I save any money for my retirement?” Whether you're 40, 50, or 60, you can start making a savings plan now.

The National Institute on Aging has these tips for people who are just starting to learn about saving for retirement:

Start Now

It's never too early or too late to start setting aside money for your retirement. The younger you are when you begin, the more time you have to save and the more your money can grow over time. Time can also provide a cushion that might help your savings to recover from dips in the investment markets (like stocks and mutual funds), which occur from time to time.

Take Part in the Retirement Plan at Work

Sign up for your employer's retirement plan as soon as possible. More and more employers are automatically enrolling workers in their 401(k) plans unless the worker makes a clear choice not to sign up (sometimes called “opting out”). If possible, put in the maximum allowed each year—or as close as you can get. Your employer might also match part of your contributions. Try to take advantage of these matching contributions. Ask your Personnel or HR (Human Resources) representative how your company's plan works. Also, talk with the professionals who manage your firm's 401(k) for advice. If your employer doesn't offer a retirement plan, ask if the organization can start one.

Make the Most of Your Other Retirement-Saving Options

Consider putting money in more than one retirement-saving plan. That is especially important if your employer doesn't offer one. Some kinds of plans could help you to save, and some can help to lower or defer (put off) your taxes. For example, you might contribute regularly to an individual retirement account or IRA, which you can open at a bank or through a broker or mutual fund. One type of IRA, a Roth IRA, allows you, the investor, to earn dividends (income) tax-free, with some restrictions, and to withdraw the money during retirement without paying Federal income taxes. You might set up an annuity (a contract between you and an insurance company). An annuity pays you income on a regular schedule, such as monthly, quarterly, or yearly, after a certain age. To learn more, see the resources listed in “For More Information.”

Figure Out How Much You'll Need

If you're like the average person, you'll probably need at least 70 percent of your annual pre-retirement income to maintain your standard of living after you retire, possibly more. Resources are available to help you calculate what you might need. For example, one useful online tool,, will help you estimate how much you'll need. The introduction and FAQs on that website can help you get started. Other calculators to help you plan can be found at Remember to plan for health care and other costs, which likely will go up in the years to come, as well as for unexpected expenses or changes in the economy.

Set Specific Goals

Plan to save a certain amount—even if it's small—each week or month. For example, you might set a goal to invest at least $250 a month in your employer-sponsored retirement plan, or you might put $25 a week into another savings plan. 

Keep an Eye on Your Investments

Get to know how your retirement plans work, how your money is invested, and what fees are charged. Review your investments at least once a year. Remember that it's best to think about your investments over time, rather than reacting to ups and downs in investment markets. As you near retirement, you might also consider shifting your money from more risky investments like stocks to usually less risky investments like bonds. A bond is less risky because it is like an IOU, but it does carry some risk. You give money to a government or company, and they promise to pay it back with interest after a certain number of years. You may also have heard about target-date funds, also known as life-cycle accounts, available in some 401(k) plans. These plans automatically shift your investments based on the date you expect to start using your retirement funds. They may not be for everyone.

Find Ways to Save More

Try to find a few ways to lower your weekly or monthly expenses. Can you reduce your cell phone costs or other monthly expenses? Bring your lunch to work instead of eating out every day? Carpool so commuting costs less? Saving this “found” money can help you build your retirement nest egg over time. Some people find it helpful to put a part of any salary increase directly into their retirement-saving plan.

Be Realistic


Make a plan at which you can succeed. Start by saving an amount of money you are comfortable with. It's better to have realistic goals—even if they're smaller than you'd hope — than to set goals you can't reach and later give up.

Be Wary of Investing Too Much in One Company's Stock

Put your money in different kinds of investments (such as American stocks, international stocks, bonds, or real estate) and avoid putting too much of your money in the stock of any one fund or company, including the company you work for. If your employer invests matching retirement money in company stock, think about moving some of that money to other kinds of investments, if possible.

Look Ahead

If you retire early and receive reduced Social Security benefits, be aware that there are other possible consequences. For example, if you are married, survivor benefits for your spouse also will be reduced if you began receiving Social Security benefits early. Also, consider buying long-term care insurance or other forms of coverage for uncovered medical expenses.

Be Prepared for Change

A sudden change in health, the death of your spouse, divorce, a stock market decline, or a job layoff could dramatically affect your household's financial picture. Whether you're close to retirement or not, having enough savings available can help you and your family weather these unexpected changes. Try hard to avoid using your retirement savings or permanently withdrawing money from your retirement accounts before you retire, unless absolutely needed.

Consider Working Past Retirement Age

Americans are living longer, healthier lives than their parents or grandparents. Working a little longer than you had planned before retiring can help add to your retirement savings. It also means you will have fewer years in retirement to dip into those savings. Experts suggest that working 5 more years makes your annual retirement income larger, giving you more to spend when you retire. Or, you might find that a part-time job before retirement provides enough to support your present needs so that you don't have to use your savings.

NIA: Saving for Retirement: What Do You Know? (PDF)

This information is based on research funded by NIA's Division of Behavioral and Social Research. It is not intended to provide individual retirement-saving advice. Your personal decisions about saving for retirement will be based on many different factors, like your own work prospects, your health outlook and the larger economic situation.

NIH/National Institute on Aging
By NIH/National Institute on Aging
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