The late start retirement guide

By Jean Chatzky - November 25, 2020

It’s never too late to start saving for retirement – That’s good news for those who haven’t yet begun to put money away for their post-working years. You’ve still got time to build up some savings.


You’ve probably heard that when it comes to retirement planning, the earlier you start, the easier it is to build up a nest egg that can support you through your golden years. That’s great advice when you’re in your 20s and 30s and you still have time to take advantage of the magic of compound interest, but it doesn’t mean that it’s impossible to save for retirement if you’re closer to the finish line.

It’s never too late to start saving for retirement – stashing money into IRAs, Roths or work-based plans like 401(k)s. That’s good news for the 42% of Baby Boomers who haven’t yet begun to put money away for their post-working years.1 If you’re among them (or the 41% of Gen Xers in the same boat), don’t worry. You’ve still got time to make build up some savings. Here’s how to get started:

Make retirement planning a priority.

You probably have many good reasons why you haven’t started setting aside money for retirement. Even if you don’t, there’s no reason to dwell now on the factors that have prevented you from saving for retirement in the past.  (As the old joke goes: When’s the best time to start saving for retirement? 20 years ago.  When’s second best? Today.)

The sooner you can get started setting money aside for retirement the better. That may require taking a hard look at your current spending to see whether there are areas where you can cut back in order to free up cash that you can save for retirement. (If you have high-interest debt, such as credit card balances, you’ll want to eliminate them first.  They’re costing you the most money.)  In addition to slashing expenses, you might also consider looking for ways to boost your income, such as taking on a part-time job or side hustle.

Figure out what you’ll need.

Having a savings goal of how much you’ll need in retirement can help you see how much progress you’re making toward getting there. You can get a ballpark estimate by using online retirement savings calculators such as the one provided by your company 401(k) plan.  If the calculators are confusing, a financial professional can give you an even more detailed estimate of how much you’ll need and provide some advice on the best money moves to get you there.

Your age may also give you some advantages that younger retirement savers don’t have. Your children may have reached or be approaching adulthood and financial independence, freeing up the money that you’ve been dedicating to supporting them for decades. Plus, you’re likely near your peak earning years, meaning you have more income that you can dedicate to retirement savings.  And, as a colleague once remarked about her 50th birthday: “I’m looking forward to making catch-up contributions.”  They allow you to put an additional $6,500 into 401(k)s each year and an extra $1,000 into IRAs.

Max out every tax-advantaged account available.

The best place to start saving for retirement is in tax-advantaged plans, such as a 401(k) or an IRA. Money that you put into a 401(k) or a traditional IRA not only grows tax-free, but it also lowers your taxable income now. This year, you can contribute $19,500 to a 401(k) account. If you don’t have access to a 401(k), you can put up to $6,000 in an IRA.

If you’re contributing to an IRA on your own, set up automatic contributions that mimic the direct deposit option that most 401(k) savers use. Having the money transferred regularly to your retirement savings account means you’ll never forget to make the transfer or be tempted to spend those funds on other things.

If you have a high-deductible health plan, you may also be able to put tax-advantaged money in a health savings account. This year, individuals can save $3,550 in an HSA, and families can save $7,100. Those age 55 and older, can put in another $1,000 in catch up contributions (if you and a spouse are both 55 and older, you’ll need separate HSAs in order to capture both catch-up contributions). You can use HSA funds at any time to pay for qualified medical expenses, but after age 65, you can take money out for any purpose at all.  Those post-65 withdrawals for other than medical expenses will be treated just like money coming out of retirement accounts, taxed but not penalized.

Keep thinking long-term.

While retirement may not be as far away as it had been when you just began working, your retirement plan still needs to last for several decades. You’ll need access to some cash or safer assets in case there’s an emergency or a market downturn early in your retirement, but you may also need to continue investing in some riskier assets—such as stocks—in order to get the returns you’ll need to make your money last.

Consider working longer.

Finally, one of the best ways to boost your financial preparedness for retirement is to push back retirement itself. Working a few years longer not only allows you to sock away additional savings, but it also means your funds will have longer to grow before you start making withdrawals.

If you’re not able to continue in your full-time job for as long as you’d like, scaling back to part-time work can still be beneficial, especially if it allows you to hold off on claiming your Social Security benefits. While you can tap Social Security as early as age 62, if you wait to claim your benefits until you hit age 70, your benefits will continue to increase by as much as 8% a year.2

With Beth Braverman





Investing involves risk including possible loss of principal. 

The opinions and forecasts expressed are those of the author and individuals quoted and should not be construed as a recommendation or as complete.



1. “The Typical American Financial Life” Nitro College, 2020.  

2. “When to Take Social Security: 62 vs. 70 Magnify Money by Lending Tree, February, 2019.


About the author
Jean Chatzky, Financial Editor, NBC's TODAY Show
Jean Chatzky, the financial editor for NBC’s TODAY show, is an award-winning personal finance journalist, AARP’s personal finance ambassador, best-selling author, and host of the podcast HerMoney with Jean Chatzky on iTunes. 


Jackson® is the marketing name for Jackson National Life Insurance Company® (Home Office: Lansing, Michigan) and Jackson National Life Insurance Company of New York® (Home Office: Purchase, New York). Jackson National Life Distributors LLC.

Jean Chatzky is not affiliated with Jackson.