Alert
Close

Chat retirement strategies with AARP’s Jean Setzfand today, Oct. 24th, at 2:00 p.m. ET

Highlights

Close

You and Your Town Contest-You could win an AARP RealPad

AARP Auto Buying Program

Contests and
Sweeps

$10,000 Winter Escapes Sweepstakes

Beat the cold and cozy up to a chance of winning $10,000! See official rules.

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular
articles

Viewed

Have You Saved Less Than $50,000 for Retirement?

It's never too late to build your nest egg

En español  |  When it comes to saving for retirement, too many folks have a lot of catching up to do.

According to most research I've seen, nearly half of people over 55 have saved less than $50,000. Another survey shows almost half of all Americans aren't contributing to a retirement plan such as an IRA or 401(k).

Most people just don't get serious about saving for retirement until their children have left the nest. Unfortunately, adult children are taking flight later and later these days.

But don't think because you're 50 or older, it's too late to start. In fact, one of the benefits of turning 50 is that the government makes it easier for you to close the savings gap by allowing you to divert extra money to a retirement account at work, or an IRA, or both.

This "catch-up contributions" provision applies to employer-sponsored plans, such as 401(k)s, 403(b)s and 457(b)s. If you'll hit the big 5-0 by the end of the calendar year and you have one of those plans, the tax laws allow you to contribute an extra $5,500 above the normal $17,000 annual limit. That means you can save up to $22,500 in pretax dollars every year between now and the day you retire.

Even without any portion of the catch-up being matched by your employer, the additional contribution translates into $825 to $1,925 in tax savings (depending on your tax bracket). You'll only pay taxes on the contributions later, when you start taking distributions from the account.

Jean Setzfand offers ways to increase retirement savings after 50

Supplement your Social Security with another stream of guaranteed income. — Images Bazaar/Getty Images

You can also put an extra $1,000 a year into an IRA.

(It's important to note that there are minimum and maximum age and income limits that restrict whether and how much you can contribute to all of these plans. Check with the IRS or a tax professional for details.)

There are, of course, other ways to invest money you've earmarked for retirement, and it's worth discussing your options with a professional to make sure you've chosen the course that makes the most sense for you and your tax situation.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Related Video

Money Makeover winner Judy Gallagher gets expert advice on increasing her savings so she can live comfortably when she retires.

Tell Us WhatYou Think

Please leave your comment below.

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Life insurance: you are covered rain or shine

Exclusive annuities for members from AARP Lifetime Income Program from New York Life.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

Homeowners Insurance
Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points