Don’t feel like you are saving enough for retirement?

Imagine this scenario:

You’re approaching 55, your kids are moving out of the house, and you’re starting to stare retirement in the face. Up until this point your life has been a blur…

So, now that you have a chance to stop and look at the figures, how much money do you have saved up for retirement?

In just 10 years will you have enough to fund the rest of your life? Many people that find themselves at this juncture would tell you, “absolutely not”. After all, according to, the majority of the population only has $148,900 saved by the age of 65. Even if you can somehow live on just $10,000 a year, this pot of money isn’t likely to last for your entire retirement.

Graph from the Federal Reserve on average balance of retirement accounts for different age groups

How to Catch Up On Your Retirement Fund

So with retirement fast approaching, how can you catch up on your retirement fund? Lucky for you, there are definitely options for you to consider in the next 10 years to maximize your lifestyle in retirement.

1) Contribute more to your 401k

Now that those money sucking leaches are out of the house – I mean, those wonderful perfect children – you should have some extra padding in your paycheck to put a much larger chunk into your retirement fund each week. The maximum contribution amount in 2015 is $18,000 (plus an additional $6,000 if you’re over 50). If you’re able to contribute the maximum, it’s probably in your best interest to do so.

Are you worried about paying taxes in retirement? Don’t be. The very fact that you’re trying to pour money into your retirement account today tells me that you don’t have much in there, which means that your withdrawal later in life likely won’t be tens of thousands of dollars a month. Chances are that you’d pay more taxes on your larger earnings today, so it only makes sense to defer your taxes until later in life by dumping money into your 401k today.

2) Max out your Health Savings Account

If you have to catch up on your retirement fund, this is definitely a smart way to go. In retirement, the average person will spend $240,000 out-of-pocket on medical expenses. Do you have $240,000 laying around? I don’t. But, you could help this situation by maxing out an HSA account and then investing those dollars in various mutual funds (that’s right, you can invest within an HSA fund!). If you’re over 55 years old, you can contribute $4,350 per year as a single, and $7,650 per year as a family. The best part is, by using the funds for medical expenses only, you’ll never pay a dime in taxes!

3) Limit your depreciating assets

Most people find themselves in a less-than-desirable financial situation because they own too many depreciating assets. The cars, the boat, even that fancy lawn mower – all of these items go down in value over time and are hurting your net worth. If you’re concerned about your retirement fund, I would suggest driving a 5-10 year old dependable car and getting rid of your other toys, especially if you hardly use them.

4) Pay off your debts ASAP

Twenty years ago, if you would ask a 55 year old if they had any debts, quite a few of them would have been able to say, “No, we just paid off our house and are 100% debt free.” Today, not only are many 55 year-olds still in mortgage debt, but they also have student loan debt because they wanted to help their kids through college. While many would consider this an admirable debt to take on, I would still treat it like the plague and try to get it out of my house immediately! Just like those depreciating assets, your debts are costing you interest and cash flow, and it would always be my recommendation to pay them down as fast as possible so that you can focus on your retirement savings.

5) Start a side business

When you hit middle age, your climb up the career ladder is typically pretty idle. You might make decent money, but what are the chances that you’ll be promoted with a big fat raise? It’s not too likely. If you want to increase your income, I would suggest starting a simple side business that will generate an extra $10,000+ a year. This could be a business of buying and selling, photography, teaching piano, or something as simple as cleaning houses. Many side businesses can be started for less than $100, but could generate quite a large income with a little sweat equity. Do you think you’d like to start a side business? Heck, it might even be fun work to do in your retirement years for a little extra spending cash.

6) Downsize sooner rather than later

For whatever reason, many people tell me that they plan to downsize in retirement, and this will provide them with the extra money they need to survive their retirement years. But why wait until later in life? I often suggest that people downsize sooner rather than later. Why?

  • Many get attached to their homes and never end up selling
  • The house should be sold when the payout is greatest, not when you’re too old and decrepit to live there
  • By selling the house now, you can likely grow the money faster than what the house value would have increased during the same time


There are many things you can do to increase your retirement fund. If you really focus your efforts in the next 10 years, you could easily contribute $10,000 to $30,000 per year toward your future, resulting in an extra $100,000 to $300,000+ in that retirement account! Will you start taking action on the items above to beef up your retirement fund?

Derek Sall
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