Starting later doesn’t mean falling behind—it just means planning smarter. At age 57, there’s still time to build a meaningful retirement cushion by focusing on intentional, strategic financial moves. With the right steps, even a late start can lead to greater stability and confidence in the years ahead.
Assess Your Current Financial Situation
Understanding where you stand financially is a critical first step. Review your income, expenses, debt, and existing retirement savings. Tools like the AARP retirement calculator provide a clear snapshot of how much you’ve saved and what you’ll need. This helps set realistic targets and shows how much you should aim to save annually going forward.
Eliminate High-Interest Debt to Free Up Cash Flow
Paying off high-interest credit card debt can significantly improve your ability to save. The extra cash freed from interest payments can be redirected toward increasing contributions to retirement accounts. Prioritize debts with the highest interest rates first, and avoid accumulating new debt to maintain this progress.
Maximize Employer-Sponsored Retirement Plans
Employer-sponsored plans such as 401(k), 403(b), or 457 accounts offer valuable opportunities to grow savings tax-deferred. People over 50 can utilize IRS catch-up contributions that allow additional savings beyond regular limits. For instance, in 2024, those aged 50 or older can contribute an extra $7,500 to a 401(k) on top of the standard $22,500 limit, which can significantly boost retirement funds.
Boost IRA Contributions With Catch-Up Options
Individual Retirement Accounts (IRAs) also offer catch-up contributions. In 2024, individuals over 50 can add $1,000 more on top of the standard $6,500 annual IRA limit. IRAs provide various options such as traditional or Roth, depending on your tax situation and retirement goals. Consistently contributing and making catch-up contributions can close the gap created by a late start.
Adopt a Diversified Investment Strategy
Growth potential is essential at this stage, so a balanced portfolio with a meaningful stock allocation is important. Stocks historically provide higher returns over time compared to bonds or cash but come with higher volatility. Diversifying investment types reduces risk and positions your savings for growth. Consulting a Certified Financial Planner (CFP) can help design a portfolio tailored to your risk tolerance and timeline.
Delay Social Security Benefits to Increase Income
Delaying Social Security benefits until age 70 can substantially increase your monthly payments. Each year you delay after your full retirement age, your benefit grows by about 8%, providing a larger, more sustainable income stream during retirement. This tactic complements an active savings and investment plan.
Seek Professional Guidance to Personalize Your Plan
Using free calculators and planning tools is a good start, but a CFP can provide tailored advice considering your entire financial picture. Professional guidance ensures your strategy aligns with goals, helps identify potential pitfalls, and explores tax-efficient options. This personalized support can increase confidence in your path to retirement.
Combining these steps can make saving for retirement at 57 realistic and effective. By focusing on debt elimination, maximizing retirement plan contributions, adopting a diversified investment approach, and delaying Social Security benefits, you can strengthen your retirement readiness and build a more secure financial future.