No matter your age and income, it’s NEVER too late to start saving for retirement. Whether you’re in your 40s, 50s, 60s, or even older, every dollar you put away builds a tiny bit more freedom in your life.
The reality is, maybe you won’t reach millionaire status. That’s OK. I’m not gonna blow smoke up your ass and tell you that you’ll be able to retire in opulence like a king.
But, if there’s anything I’ve learned about financial independence, it’s that the journey is more important than the end goal. Building wealth and freedom is about saving whatever you can, with whatever time and resources you have. It’s about making sustainable life changes that make you happier now, and make your retirement years more enjoyable and less stressful.
Every little bit counts
Who is wealthier… A person who has $1 in their bank account, or someone who has $0 dollars? Silly question, I know, but bear with me for a second… The answer is that the person with $1 is wealthier because they have money and the other person doesn’t.
How about someone with $1,000 versus someone with $0 dollars? The person with $1,000 is obviously wealthier. They can buy more stuff, and do more things. They have the tiniest bit more freedom than the person with zero.
Now what about someone with $10,000 saved? Do you get where I’m going with this?… The more you save, the more you have, even if it seems like tiny amounts. No matter how young you are currently, you’ll eventually want the ability to retire. And when you do, you’ll want to be in the strongest position possible. You may not be able to save millions, but that doesn’t matter. The goal is to keep growing your bank balance higher than it was yesterday, dollar by dollar.
This is why they say “every dollar counts”. It’s never too late to start saving for retirement because each dollar you save puts you in a better position and generates more freedom.
Changing your mindset
A member in our Facebook group recently shared that they just crossed $100,000 in total net worth. Something they thought was impossible just 5 years earlier. Here’s the post 👇👇👇
I love reading stories like this. It proves that people don’t know what they’re capable of until they get started.
Saving for retirement might seem impossible for you based on your current situation. Maybe you’re in debt and can’t fathom getting out. Maybe you’ve just experienced a horrible financial setback and are starting from scratch.
Building something from nothing is never easy. But you CAN do it. As overwhelming as things might seem, when you begin putting away money and seeing your pile grow slowly, your mindset will change. Results will come → but only after you commit and take action.
Your mindset has a huge impact on your financial trajectory. Start mingling with folks who have been in similar situations as yours. Read inspiring stories of families who started with nothing and built a better future for themselves. Kristy Shen’s story, for instance, is truly miraculous! It is never too late to start saving for retirement (or make any changes in life for that matter!)
Learn about how money works
Most people learn about finances from watching their parents, which can produce good or bad results. If nobody taught you about money growing up, don’t fret. It’s much more common than you think.
If you’ve reached middle age and have nothing saved, it’s probably time to go back and re-learn the basics of money management. Put your pride aside, and start with the basics. Here are a few steps that will help you get more control of your finances:
1. Find good advice that you can trust
📚 Here are a few books we love: Your Money or Your Life, Simple Path to Wealth, and The Psychology of Money. Read as much as you can about timeless money principles.
🎧 As for podcasts, listen to ours! Here are the top 10 listened episodes that our listeners have loved the most. You can also Google the top personal finance podcasts and pick the ones you think look interesting.
💻 Non-profit and government websites like USA.gov, MyMoney.gov, or Money Management International can be surprisingly helpful! They have information about government resources and possible assistance if you qualify.
💸 For help getting out of debt, these two non-profits can help you create a payoff plan: Money Management International and NFCC. They also provide free counseling services!
2. Budgeting and tracking expenses
If you don’t know exactly where your money is going, it’s hard to make changes and control it moving forward.
Here’s a guide on how to start tracking your monthly expenses. In today’s digital world, you can use the help of free apps like Empower to help automate tracking!
As for budgeting, check out our beginner’s guide on making a budget. It doesn’t need to be overly complex! Any simple budgeting system is better than nothing at all. You could also consider using a budgeting app like YNAB. While this app does cost a few dollars per month, the average user saves over $6,000 in their first year using YNAB. That’s not chump change!!
3. Embrace frugality to save more
Being frugal isn’t about cutting out all unnecessary costs and spending as little as possible. It’s about trimming valueless crap out of your life, so you can redirect those dollars into things that DO provide value.
Here are 20 frugal living tips to help you cut down on monthly expenses. Start with the biggest spending areas in your life (housing, cars, and food for most people) and see where you can cut back.
Spending less has a twofold effect. It not only helps you save more money for retirement, but it also reduces how much money you’ll need for those retirement years. Slimming your lifestyle down today means a more sustainable tomorrow.
4. Learn to invest
Don’t worry, investing is nowhere near as complex as it seems.
We’ve written a beginner’s guide to investing here, and also a thorough guide on how to buy index funds. This includes the funds and accounts we personally invest in!
If you have an employer 401k with a matching program, you’ll want to take advantage of that first. Next, check out the 7 money gears to see where you are in your financial journey and how that influences where to save and invest your spare dollars.
5. Patience and repetition
There’s no quick way to get rich. I promise you that. Money takes time to earn, save, and grow.
While it’s tempting to check your bank balance every 20 minutes to see what has changed, it’s better if you don’t. Checking in on your progress too often can be deflating because change happens slowly.
Instead, focus on what you can control. Save, invest, repeat. The results will come soon enough, but you have to be patient and stay consistent.
You have more advantages than you think
While young folks have the advantage of time when saving for retirement, older people have advantages too! Knowledge, experience, and access to certain government incentives.
Here are a few things on your side…
Catch-up contributions
Every year the IRS sets limits on how much you can contribute to retirement accounts for tax advantages. And those limits are higher for people aged 50+. This is specifically designed to help them “catch up“ on retirement savings.
Here are the accounts and limits as they stand in 2024:
| Retirement Account | Regular Contribution Limit (2024) | Additional Catch-Up Contribution (2024) | Total Contribution Limit (Age 50+) |
|---|---|---|---|
| 401(k) | $23,000 | $7,500 | $30,500 |
| 403(b) | $23,000 | $7,500 | $30,500 |
| 457(b) | $23,000 | $7,500 | $30,500 |
| SIMPLE IRA | $16,000 | $3,500 | $19,500 |
| Traditional IRA | $7,000 | $1,000 | $8,000 |
| Roth IRA | $7,000 | $1,000 | $8,000 |
If you are over age 50, take advantage of this benefit. And if you are under age 50, keep saving and get ready to bump up your contributions in the future.
More experience and maturity:
Another advantage you have as an older saver is more maturity and life experience. You’ve lived through ups and downs, understand how the world works, and are more realistic about money expectations.
You’ve also probably learned what *not* to do with money. If you’re behind on savings goals, look back at your life and learn from those mistakes. That way you can make a positive pivot in the years ahead.
High income (or earning potential):
Another benefit of age is higher earning potential. The median income of American workers is highest between the ages of 45 and 54.
This means you can sock away money at a faster rate than younger folks. You might not have as many years to let your investments grow and compound, but you can make up much of the difference by saving more.
If your income is on the lower side, there is always room to boost it. You can ask for a raise, pick up a side hustle or second job, or even switch jobs completely. Leverage your work experience and knowledge to make as much as you can.
Forget the past, start NOW
Another big reason you might think it’s too late to start saving for retirement is that you feel that you’ve already missed out on “market rallies.”
Yes, the real estate market is at all-time highs. Yes, the stock market has also been killing it. Even alternative investments like Bitcoin and gold have crushed it over the last decade. Perhaps you feel that you’ve missed out on big gains.
But, forget the past for a second and think about the future. Investments like stocks and real estate continue to go up over time. 20 years from now, you’ll look back and probably think things are cheap right now. Market highs are only temporary – new records will continue to be set as time goes on.
As the saying goes, “The best time to invest was yesterday. The second best time is NOW.” If you are waiting for a drop in prices to invest, you’ll probably be waiting forever. Don’t wait. Start now. Time in the market is far more powerful than trying to time the market.
The Bottom Line:
It’s never too late to start saving for retirement. Sure, it would have been nice if you started earlier, but there’s no going back in time. What matters now is taking proactive steps forward, by reducing expenses, investing as much as you can, and taking advantage of catch-up contributions within retirement accounts.
Remember, financial freedom is not about having millions of dollars in the bank. Every single dollar you save contains a tiny bit of freedom and security. Save as much as you can with the time and resources you have – you won’t regret it.
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