How to catch up on retirement savings

More than half of Americans age 50 and older worry that they won’t have enough money in retirement, and nearly as many wish they’d started saving earlier. Unfortunately, you can’t turn back the clock — but that doesn’t mean you’re out of luck.

If you’re feeling behind on retirement planning, there are several strategies to help you catch up. Even if you wish you’d started in your twenties, the next best time to start is now. Read on to learn how to catch up on retirement savings and live your best life in your golden years.

Use the following tips to earn more, cut expenses, and maximize your returns. Then shuffle extra cash into the appropriate accounts to jump-start your retirement savings.

If you’re 50 or older, you’re eligible to make catch-up contributions to certain retirement accounts. This means you can contribute more than the standard annual limits, giving your accounts an added boost.

Those 50 and older can contribute an additional $1,000 each year to their IRA and $7,500 each year to their 401(k) or other workplace plans. The following is a breakdown of current contribution limits, based on age:

Additionally, starting in 2025, the SECURE 2.0 Act lets those ages 60 through 63 make a catch-up contribution of $11,250 to their workplace account, bringing their total allowable contribution to $34,750.

Cash plays an important role in your portfolio, providing you with much-needed liquidity in retirement. But don’t let your cash sit around without working for you.

For competitive yields and easy access to your money, a high-yield savings account is a good choice. Currently, you can earn up to 4.5% APY with the best high-yield savings accounts. To put this into perspective, a savings account at one of the major U.S. banks earns 0.01%, while the national average savings account rate is just 0.4%.

For example, if you deposit $10,000 into a savings account that earns 0.1% APY and leave it there for five years, you’d end up with a balance of $10,005. However, if you chose a 4% high-yield savings account instead, you would have a balance of $12,518 after five years — that’s your $10,000 principal balance plus $2,518 in interest — without making any additional contributions.

One of the most straightforward, simple ways to catch up on retirement savings is to increase your income. The more money you have coming in, the more you can direct toward your retirement savings and investments. Here are three basic ways to earn more:

• Ask for a raise. If you think there’s room to earn more in your current role, don’t hesitate to ask. Research salaries for similar roles at other companies, and back up your request with a list of your achievements and responsibilities.

• Start a business or get a side hustle. If you have the bandwidth and time to work outside of your 9-to-5, consider starting a business or side gig. You could walk dogs, deliver pizzas, or find a gig online — the possibilities are endless.

• Look for a higher-paying job. According to recent data from ADP, those who switch jobs have higher median year-over-year salary changes. Getting another job offer gives you a fresh chance to negotiate your compensation, potentially leading to a substantial raise.

High-interest debt grows fast, eating into your budget every single month. The sooner you eliminate your debt, the more you can put toward your retirement savings.

Focus on your highest-interest debt first, putting as much as you can toward the balance each month. If possible, put any extra money toward the principal, not interest. This lowers your loan balance and, therefore, the total amount you’ll pay.

Read more: Debt snowball vs. debt avalanche: Which method is better for paying off debt?

It may sound obvious, but using a budget to track your income and expenses can help you find extra money to save for retirement. There are endless ways to budget, but the zero-based budgeting method involves assigning a purpose to every dollar you earn. This can help you be more intentional about prioritizing retirement.

Use your budget to audit your spending, eliminating or reducing any categories where you want to cut back. Then redirect those dollars toward your retirement or savings accounts, adding these contributions as a line item in your budget.

You may have heard the advice to “pay yourself first,” which means prioritizing your own savings before paying bills or buying extras. Automation makes paying yourself first as easy as a few clicks.

Once you set up a budget and determine how much you’ll save or invest each month, automate these transfers into your retirement accounts. If you have a workplace-sponsored plan, contact HR to set up automatic paycheck deductions.

Read more: Should you automate your savings? Pros and cons to consider.

If you aren’t already doing so, earning your employer’s match is a simple way to speed up saving for retirement. An employer match is essentially free money — it’s cash your employer contributes to your 401(k) or other workplace plan based on the amount you contribute.

For example, if your employer matches your contributions dollar-for-dollar up to 5% of your salary, you could be saving 10% of your income by contributing just 5%.

If your employer offers this benefit, aim to contribute enough to get the full available match.

If you need a longer runway to be able to save enough for retirement, consider working beyond retirement age. Not only does this give you more time to save, it gives your investments more time to grow — and shortens the amount of time you’ll need that money to last.

Another bonus of delaying retirement? For each month you delay drawing on Social Security between the ages of 62 and 70, your benefit amount increases — adding a bigger cushion to your own retirement savings.

Regardless of your age, saving for retirement isn’t a lost cause. Even if you’re having regrets about not starting sooner, act now, using these strategies to speed up your progress.

At the same time, make sure your goals are realistic. Think about the life you want to have in retirement, and consult a financial advisor if you need help estimating how much you’ll need. You may even be surprised to find out you’re further along than you thought.