Are you feeling behind on your retirement savings? If so, you’re not alone. Many of us find that life’s expenses have a way of derailing our best savings intentions. But don’t worry—there are practical steps you can take right now to catch up and secure the retirement you deserve.

Life Stages and Savings: In our 20s, we’re just getting started—whether it’s launching a career, paying off student loans, or simply finding our footing. By our 30s and 40s, expenses skyrocket as we buy homes, raise kids, and navigate the costliest phase of life. It’s common to focus on immediate needs and put off retirement savings. But something magical happens as we hit our 50s: a “retirement light bulb” goes off. We begin to seriously consider whether we’ve saved enough and what more needs to be done. If this sounds like you, it’s time to focus on catching up.

Strategies for Catching Up:

1. Maximize Retirement Contributions: If you have access to an employer-sponsored plan like a 401(k), make sure you’re contributing the maximum amount allowed. For 2024, that’s $23,000 if you’re 50 or older, with an additional $7,500 in catch-up contributions. If you’re not sure what your plan allows, check with your HR department.
2. Take Advantage of Employer Matching: Employer matches are essentially free money. If your employer offers a match, contribute at least enough to get the full amount. Even if you’re conservative with your investments, ensure you’re capturing this benefit.
3. Consider a Health Savings Account (HSA): If you have a high-deductible health plan, contribute to an HSA. These accounts offer tax-deductible contributions and tax-free withdrawals for medical expenses. Plus, after 65, withdrawals for any reason are penalty-free, making the HSA a potential supplemental retirement account.
4. Cut Expenses and Increase Savings: It’s simple but powerful—cutting unnecessary expenses frees up more money for your retirement savings. Treat your savings as a non-negotiable expense.
5. Delay Retirement: Working a few extra years can significantly boost your retirement savings. Not only does it give you more time to contribute, but it also allows you to delay drawing on your investments and claiming Social Security, which increases your monthly benefit.
6. Invest Aggressively (But Wisely): Consider being more aggressive with new contributions, particularly if you have a longer time horizon. However, be cautious with your existing portfolio, especially as you near retirement.
7. Downsize or Relocate: Moving to a smaller home or a lower-cost area can dramatically reduce your expenses and free up equity for retirement. If you’re considering a big move, try to do it while you’re still working to make mortgage qualification easier.
8. Utilize Catch-Up Contributions: Beyond your 401(k), make sure you’re maximizing contributions to IRAs. You can add an extra $1,000 per year if you’re 50 or older.
9. Reduce Debt: Entering retirement with little or no debt will ease your financial burden. Focus on paying off high-interest debt and consider whether it makes sense to pay off your mortgage.
10. Get Professional Advice: It’s never too early (or late) to consult a financial advisor. They can help you create a plan tailored to your specific situation, ensuring you’re on track to meet your goals.
11. Explore Other Income Sources: If you’re behind on savings, look into other income streams—whether it’s rental properties, part-time work, or a side business. Every bit helps.

Conclusion: Catching up on retirement savings might seem daunting, but by taking these steps, you can make significant progress. Remember, it’s not about where you start but where you finish. So, start today and take control of your retirement future.

As always, our team at Sanchez Wealth Management can help you in making these decisions. We also have our team of real estate, mortgage and legal professionals ready to help you.