Got a Late Start on Retirement? Here’s How to Fix It

Got a Late Start on Retirement? Here’s How to Fix It

Something happens when you turn 40. First of all, you realize the big 4-0 isn’t nearly as ancient as you thought it was when you were 22. You also decide that reading glasses are actually pretty handy—and the right pair can make you look quite distinguished. On the other hand, you realize that retirement isn’t as far away as it used to be. And you can no longer ignore the fact that at the rate you’re going, you’ll never build up enough of a nest egg to kick back and enjoy retirement—if you’re able to retire at all! But if there’s anything else you’ve learned in your 40-odd years, it’s that time changes many things. And if you’re smart and you take action now, you still have enough of it to change your retirement outlook completely. Use What You’ve Got If you’re like most folks in their 40s, you probably have around $10,000 saved for retirement—so you’re not totally unfamiliar with retirement plans and how they work. You simply haven’t been making the most of them. Assuming you have no debt except for your home and a decent emergency fund to keep you afloat in tough times, there’s nothing holding you back from taking full advantage of your retirement savings options by investing at least 15% of your income right away. Here’s where you can reap at least one of the benefits of age: a higher salary. People age 45–54 are at or approaching their peak earning years, averaging more than $55,000 in annual income. That means you can invest $8,250 a year for retirement, compared to the average...