Practical Strategies for Catching Up on Retirement Savings in Your 50s

To effectively tackle high-interest debt, prioritize your debts and focus on paying off the ones with the highest interest rates first. This approach can save you a significant amount in interest payments over time. Also, consider seeking advice from a financial advisor to develop a comprehensive plan that includes debt repayment, budgeting and retirement savings.

Consider Downsizing Your Home

Downsizing to a smaller home can reduce living expenses and provide a significant boost to your retirement savings. But it's not just about adding the proceeds from downsizing into your retirement savings. You can reduce ongoing expenses such as the property taxes, maintenance and utility costs associated with a larger home. This can also free up money that you can redirect toward your retirement savings.

There may be other lifestyle benefits, too. A smaller home may mean less physical upkeep and more time to enjoy retirement activities. If you don't have dependent children, moving to a 55-and-older community can offer social opportunities and amenities tailored to your interests and needs.

Use Diligent Budgeting to Boost Retirement Savings

Another tool to boosting your retirement savings is to thoroughly review your current expenses and income. Look for areas where you can reduce spending, such as dining out, subscriptions you no longer use, or downsizing your vehicle. Every dollar you save can be redirected toward your retirement savings.

Moreover, regularly review and adjust your budget to reflect any changes in your financial situation. This could include changes in income, unexpected expenses, or shifts in your retirement goals. A flexible and realistic budget is a powerful tool that can help you stay on track with your retirement savings, even as your circumstances change.

Increase Your Income Opportunities

Consider increasing your income. This could be through part-time work or a hobby that can generate extra income. Any extra income (after taxes and expenses) could be used to further fund your retirement. Just be sure that any new income opportunity you pursue is financially worthwhile after accounting for taxes and expenses.

Determine whether working longer makes sense for you, especially if you love your work. Remember that while you must start taking distributions from your retirement accounts, you can start collecting Social Security as early as 625 or as late as age 70. The longer you wait (between age 62-70), the greater your monthly payment will be.6 You can also keep contributing to your Social Security as long as you're working and delay taking benefits until after you stop. But the increase for delaying benefits stops at age 70.

You should check with the Social Security Administration about how much you will get when you start collecting. It can vary from one person to another. You can start by logging into your account7 there to see what your benefits might be. You may have to create your account first. You can contact them directly8 if you have additional questions.

Consider selling valuable items you no longer need or use. You could hold a garage sale for lower value items — and consign higher value items to maximize your profits. Either way, selling off things you no longer need will make it easier for you downsize your home in the future.

Consider Annuities and Long-Term Care Insurance

Now is the time to consider annuities (for additional income in retirement) and long-term care insurance (to protect your saving).

Annuities can offer a steady income stream later in life, especially if you invest now and have time to grow your savings. There are many different types of annuities with different growth and risk profiles, and different policies for how they pay out over time. Be sure to do your homework — and talk with a financial advisor — before investing. This will help you ensure that you choose an option that aligns with your retirement goals and risk tolerance.

Long-term care insurance can be a wise investment in your 50s. It can help cover the costs of long-term care, which isn't typically covered by Medicare. This will help protect you from spending down your retirement savings from unexpected skilled nursing or assisted living costs.

Stay Focused on Your Catch-Up Plan

Catching up on retirement savings in your 50s may seem daunting. Yet with the right strategies and some discipline, it's achievable. By maintaining your focus and following all the strategies here, you can substantially increase your retirement savings — and look forward to a more comfortable retirement.