4 Ways to Prepare for Retirement if You’re Starting Later Than You Planned

You’ve always considered retirement savings important, but after paying the monthly bills and saving for more immediate goals, like a house, you often didn’t have anything left over to save. Now you’re no longer in the early stages of your career, and you may have a bigger salary, but you’re worried about not being able to retire when you planned.

You’re not the only person in this situation, and you’re not doomed to work until you’re 85, either. You just need a solid savings strategy, and you can start building one by doing the following four things.

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1. Free up more cash for savings

Review your budget and look for areas where you might be spending more than you need to. Consider using a budgeting app if you don’t want to track all of this manually. See if you can cut back spending in these areas and divert that extra savings to retirement.

If that’s not possible, you may have to explore ways to boost your income instead. You might be able to negotiate a raise or start a side hustle to bring in some extra cash. You may want to keep some of this extra cash for yourself, but make sure you increase your retirement account contributions first.

2. Contribute as much as you can on a regular schedule

Regular retirement account contributions help you build your savings more quickly, and if you automate them, you eliminate the risk that you’ll forget to set money aside. You may already be doing this with 401(k) contributions. You can do this with your IRA as well. Most accounts enable you to set up recurring transfers from linked bank accounts.

Know what the annual contribution limits are for the accounts you’re using, and try to get as close to them as you can. For example, adults under 50 can contribute up to $24,500 to a 401(k) in 2026 and $7,500 to an IRA.

Adults 50 and older are allowed to make catch-up contributions. These are additional contributions you can make beyond the standard limits. You can set aside an extra $1,100 in your IRA this year as long as you’ll be at least 50 by the end of 2026. Adults aged 50 to 59 and 64 or older may save up to $32,500 in a 401(k), while those aged 60 to 63 by the end of the year can save up to $35,750.

3. Consider delaying Social Security

Your Social Security claiming age affects the size of your monthly benefit and, consequently, how much you receive over your lifetime. You qualify for the full benefit you’ve earned based on your work history at your full retirement age (FRA). This is 67 for most people today.

Claiming before this age can shrink your checks by up to 30%, while delaying beyond this age will grow your checks by up to 24%. You qualify for your maximum benefit at 70.

Early claiming can make sense if you have a short life expectancy or can’t cover your living costs any other way. But if those things don’t apply to you, delaying Social Security could maximize your lifetime benefit. This can reduce the strain on your personal savings.

4. Don’t retire all at once

If you try the strategies above and you’re still worried about coming up short, a phased retirement may work better for you than a traditional one. A phased retirement is where you gradually reduce your hours in the workforce, rather than quitting all at once.

This lets you enjoy some of the freedoms of retirement while still retaining a paycheck to supplement your personal savings. It reduces the length and cost of your retirement while allowing your investments to grow even more.

Figure out which of the above strategies appeals the most to you and put them into action. Then, check in with yourself at least annually to see how you’re doing. Make changes as needed to stay on track, and don’t be afraid to change your retirement date if you’re worried about not having enough.

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