If you’ve turned 40 and haven’t saved much for retirement, you may find some solace in a couple of areas.
For starters, you’re not alone. Based on an October study by the FINRA Investor Education Foundation, 38% of millennials (the oldest of which are 43) don’t have any sort of retirement account. So you’ve got some company, for better or worse.
Pam Krueger, founder of Wealthramp and co-host of “MoneyTrack” on PBS, noted another potential bright side. “At 40, you’re probably at or near your peak earnings,” Krueger said, adding that there’s no time like now to get started.
“Maybe you’ve had a setback, a divorce and illness … maybe you just haven’t been a saver,” she said. “But my God, you’re only 40. You’ve got 45 years to invest. You’re OK. But you can’t screw around here.”
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Jake Heisler, CFP, managing partner of Quaker Wealth Management, agreed that now is the time to get started if you’re 40 and lacking retirement savings. He advised taking an honest look at why you haven’t saved much to this point, along with honesty about your goals. For example, if you’re just starting now, dreams of retirement at 55 are extremely unlikely to come true.
Here are nine ways to get things rolling.
Start Saving Right Away
Begin saving immediately, even if it’s a small amount. You can even start small and increase your savings gradually.
Heisler said he’s a bit reluctant to throw out a suggested percentage you should be saving. Every situation is different, after all. But he settled on 10% as a good goal, provided that you’re checking in regularly to see how things are going.
“You can prioritize a high percentage of savings if your cash flow allows for it,” Heisler said. “There is some making up to do. You have to save more than the average person to get to the same place.”
To make things easier, set up automatic transfers from your paycheck or bank account.
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Focus On Financial Fundamentals
Even if you’re starting late, many of the basic fundamentals still apply. For example, targeting high-interest debt and establishing an emergency fund to lessen the likelihood of having to dip into whatever savings you have are great ways to start.
“It’s not all that different than other times in life,” Heisler said.
Establish a Budget and Priorities
If you’ve been dragging those heels on making a budget and sticking to it, it’s time to get over that.
“This is the day to adopt a strategy,” Krueger said. “Don’t run and hide.”
She added that financial priorities need to be set, and that not all of them will be painless. For example, saving for your children’s education may need to take a hit.
“Prioritize yourself over your kids,” Krueger explained. “Yes, I said it. There’s no financial aid for you, later.”
Take Advantage of Whatever Benefits Your Employer Offers
Contribute enough to your 401(k) or 403(b) to maximize employer matching, if your company offers it. This is basically free money, so don’t miss out if your cash flow can take it.
Other possible employee benefits include tax-advantaged health savings accounts. Some companies will hook you up with vetted, fee-only financial advisors. Take the time to understand all available options.
Invest Wisely
“You’re not going to play catch-up by investing a big lump sum all at once,” Krueger said.
She instead touted dollar-cost averaging, an investment strategy that involves investing a fixed amount of money at regular intervals, no matter how the market is doing. This approach helps reduce the impact of market volatility and timing risks.
Smart asset allocation (dividing your portfolio into different types of assets, like stocks, bonds, etc.) is also key. While you’re at it, be sure to dodge unneeded, investment-related fees and other forms of waste whenever possible.
Ask For a Raise
It may be a long shot, but asking for a raise is worth a try.
“You’ve got to ask for it,” Krueger said. “I mean, don’t be tone deaf and ask for a raise if your company just laid off 10% of the workforce. But you have to ask.”
Consider a Side Hustle
A part-time gig may help you make up for lost time. If you can direct all or most of the proceeds into your retirement savings, all the better.
According to Indeed, a lucrative side hustle can help you make between $500 and $1,000 in extra income per month.
Be Consistent
Consistency helps you develop good financial habits, such as regular saving, budgeting and investing.
This also means staying the course when the neighbors pull up in a new car and you really want one. Especially if you’re starting late, the bar for dipping into savings should be very high.
“You can’t go in and then drop out,” Krueger said. “Stay in and stay consistent.”
Get Help
A trusted friend with financial know-how or a trained financial pro can be a great asset. They can help you stay accountable and provide a positive nudge when needed. They also may be able to help you get over that hump and finally get rolling.
“It’s never too late to start,” Heisler said. “Every dollar you allocate to your future is worth it.”
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This article originally appeared on GOBankingRates.com: 9 Ways To Boost Your Retirement Savings After 40 for a Late Financial Head Start
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