Way Behind on Retirement Saving? Here's How to Catch Up

Couple planning for their retirement
Photo: Musketeer / DigitalVision / Getty Images

No one wants to wake up one day and feel like the years have passed them by. But you know what’s even worse? Waking up and realizing that you’ve fallen too far behind on your retirement planning.

Unfortunately, that’s the position too many Americans are in. According to research from the National Institute on Retirement Security, the median retirement account balance in 2021 is just $134,500 for near-retirement households. Meanwhile, 67% of Americans think there is a retirement crisis in the country and 56% are concerned about achieving a financially secure retirement.

If you find yourself in this position, it’s time to stop worrying and do something.

John Sweeney, executive vice president of retirement and investing strategies at Fidelity Investments, compares it to scheduling a visit with your doctor after going way too long between appointments. “You know they’re probably going to tell you to change your diet and exercise more,” he says. “But the reason the doctor will tell you that is that you can get back on track.”

Consider these tips your prescription for taking back control of your financial future.

Get a Plan

What’s the biggest difference between those people who feel confident about their retirement, and those who lack confidence? According to the 2015 EBRI report, it’s participation in a workplace retirement plan, like a 401(k).

That makes sense. When you’re in a workplace plan, you save automatically, with money coming out of every paycheck. If you have a plan available to you and you’re not enrolled, call the benefits manager today.

If you don’t have a plan available, you can do it yourself with an IRA or Roth IRA, and set it up so that money is electronically transferred out of your checking account and into your retirement savings on a monthly basis. If you’re under 50, a monthly contribution of $500 will get you to a full $6,000 IRA contribution by year-end; if you’re 50-plus, your number is $583.33 (because your max is $7,000, including a $1,000 catch-up contribution). 

And if you’re not sure where to invest that money? Look for a target-date retirement fund that will pick an appropriate mix of investments for your age and estimated retirement date.

Work Longer

Beyond automatic saving, the most effective thing you can do at this point is to increase the timeframe over which you’re working.

Let’s say you’re 55, and aiming for retirement at 62. If you’re starting to save now, you could double your contributions to 20% of your income for the next seven years — but that still won’t be as impactful as working another three years until age 65, says Sweeney, or eight years until age 70. Not only is that another three or eight years of making money that you can contribute to your retirement fund, but it’s also fewer retirement years for which you’ll need income.

Another perk of waiting until 70 to retire? Fatter checks from Social Security. For every year you put off starting Social Security from age 62 to 70, there’s an 8% increase in the payment you receive. Deferring all the way from 62 to 70 adds up in your monthly checks.


By the time you retire, you want to be able to replace most of your fixed expenses with predictable income. That income comes from Social Security, any pensions you might have, and being able to withdraw about 4% of your retirement savings annually. (If you keep your withdrawals around 4%, your savings should last 30 years, which is long enough for most.) But what if you’re looking at your numbers and you’re still short? Then it’s time to right-size your life.

That may mean moving to a smaller home, which should mean saving on your rent or mortgage payments; your utilities and maintenance might go down as well. It may mean getting rid of a car and using public transportation instead. It may mean going from two vacations a year to one.

Don’t wait until you retire to make these moves. Downshifting while you’re still working will allow you to put additional money away for retirement.

Make Catch-Up Contributions

People in their fifties have the ability to make retirement plan “catch-up” contributions every year. We noted the additional $1,000 you can contribute to an IRA. But you can also contribute an extra $6,500 to your 401(k) (as of 2021), and, if you’re 55-plus, an extra $1,000 to your Health Savings Account or HSA. 

But to find that extra money, you’re going to need to find room in your budget. And yes, if you aren’t living on a budget, it’s time to start. 

Block out time on your calendar, pour yourself a glass of wine, and take a deep breath. Then take a hard look at your income and expenses (free apps like Mint can help you track the latter). Look at each expense category and ask yourself where you can cut to free up more money to put away for tomorrow. For every dollar that you find, schedule an automatic transfer so that the money actually moves out of your spending account and into savings. That way you’ll have the confidence of knowing that it will actually happen.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. National Institute on Retirement Security. "Retirement Insecurity 2021: Americans' Views of Retirement," Pages 4, 6.

  2. Internal Revenue Service. "Retirement Topics - IRA Contribution Limits."

  3. Social Security Administration. "Early or Late Retirement?"

  4. Internal Revenue Service. "Health Savings Accounts and Other Tax-Favored Health Plans," Page 6.

  5. Internal Revenue Service. "Retirement Topics - 401(k) and Profit-Sharing Plan Contribution Limits."

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