The majority of us are told to begin saving for retirement as early as possible. However, how many of us put any true importance on that advice? Although many people started saving money for their retirement, the rest may not have given it any thought—or even know where to start.

It is imperative to save for retirement. Without a safety net, retirement may never happen. We all deserve to rest and enjoy our golden years, so it is time to start saving for retirement—even if you are a late bloomer. With the new tariffs being enacted and an overwhelming recession looming, now is the time to start.

Here are the top retirement savings catch-up strategies for late starters:

Ponder Retirement Lifestyle

Think about what you want your retirement lifestyle to look like. Spend time pondering what you want to do, what your bills will be, and where you want to reside, if you move. Don’t forget to be realistic!

Here are several important questions to ask yourself:

  • Is your retirement lifestyle similar to your current lifestyle?
  • Do you want to relocate to a different/better cost of living?
  • Do you plan to travel?
  • Do you have medical issues?
  • Do you want leftover money for charity, grandchildren, etc.?

This is a great place to start in determining how much money you will need to retire. The more realistic with the funds you need, the better prepared you are to create an effective strategy.

Eliminate Debt

If you have any debt, now is the time to get rid of it. According to a survey, the average U.S. citizen has a debt of over $155,000.

Start with paying down the debt with the highest interest rate. You can take the money you save on interest and transfer it into a retirement portfolio. This allows you to make money off of compound interest as the days pass. In other words, your money is working hard for you, making money.

Create a Budget

Now that your plan is in motion, create a budget and stick to it. No wavering allowed, as you do not have the time for setbacks.

Creating a budget for your retirement includes categorizing your expenses. For example:

  • Mortgage payment
  • Groceries
  • Utilities
  • Insurances
  • Medical expenses
  • Gas
  • And more

Next, establish monthly estimates for each item. Don’t forget to anticipate any changes in prices that may be on the horizon to allow for flexibility.

Maximize Retirement Account Contributions

If you have an IRA, 401(k) plan, or 403(b) plan, this is a great way to grow your retirement savings. All contributions are tax-advantaged. They can additionally be invested in a diversified way to protect your investments.

If your employer matches contributions to your retirement account, this helps you earn more money by the time you retire. If your employer offers this, be sure to consider it.

The IRS allows people 50 and older to contribute an additional $1000 to their IRA and an extra $6,5000 to 401(k) and 403(b) plans. They are referred to as “catch-up plans” and can greatly help you save for retirement, and fast. Experts reveal that putting your budget savings toward your retirement catch-up strategy is wildly effective.

Consider Annuities

Annuities can help grow your retirement savings. They are not for everyone, yet you should consider if this is a good choice for your retirement plan.

An annuity is a “contract purchased from an insurance company with a large lump sum in return for regular payments, commonly used as an income source in retirement.” They earn interest, thus increasing monetary contribution to your retirement plan.

Annuities are a low-risk way to fund your retirement account in addition to other investments. A single premium immediate annuity (SPIA) is a great choice for many. The SPIA is in exchange for a lump-sum premium, you get a guaranteed stream of periodic payments one year after purchase. These payments include a partial return of the premium and interest earned.

If you have more than 10 years until retirement, a deferred annuity may be more fitting. This type of annuity is created to permit your contract value to increase as you continue working toward your retirement. The longer you wait to begin the annuity income payments, the more your money will grow and help you in retirement. Once it is time to pull, it switches from accumulation to distribution mode, and you begin receiving regular income payments.

Bottom Line

If you are a late starter for retirement, you don’t have to worry. By following proven strategies, you can have the retirement of your dreams. By considering the retirement lifestyle you want, eliminating any debt, and creating a budget, you can get a jump start on savings.

Maximizing retirement contributions and considering annuities can quickly increase your retirement savings. By putting forth the right methods as soon as possible, you can retire with peace of mind and enjoy your golden years!