It’s never too late to start planning

When it comes to financial planning, start early. It’s preferable to start saving at an early age, but not everyone can manage it.

In fact, one-third of Americans haven’t saved for retirement at all.1 If you’re one of those just getting started, you’re not alone. Discover how your money can still work hard for you.

Set up a 401(k) or 403(b)

Your company’s retirement plan is a good starting point, since you might be eligible for a company match. Passing that up is like turning down free money and employer benefits.

An employer sponsored plan lets you contribute up to $18,000 per year, and if you’re over 50, you’re able to contribute an additional $6,000 per year.2 After maxing out your contributions, consider funding an individual retirement account (IRA). Contribution limits are $5,500 and those 50 and over can invest an additional $1,000 per year.2

Delay Social Security

As guaranteed income that can’t be outlived, Social Security can play a starring role in your retirement. There are many strategies to claiming this benefit, and the timing of when they start can result in a large difference in income.

You’re first eligible for Social Security at age 62, but you’ll receive a penalty for each month you take it before your full retirement age (somewhere between 66 and 67, depending on when you were born). And, for each month you wait beyond your full retirement age, you get a bonus.3

The result: you can greatly increase the amount of your benefit by waiting until age 70 when the incentives for delaying stop rising.

Adopt a retirement budget now

Financial planning experts say you should aim to replace 70 to 80 percent of your pre-retirement income, since some expenses related to work will disappear.4

Consider reducing expenses related to commuting, wardrobe, and even work lunches to help free up additional savings.

Examine your debt

Making ends meet when income drops in retirement will be much more manageable if you are debt free. Even a mortgage, which helps you build equity, can drain limited resources. To start, target the highest-interest debts first, while paying just the minimum on others. After you’ve closed out one high-interest debt, consider the next highest.

Leverage your home

For those who have significant equity in their home, consider downsizing to less expensive digs. Less space can also help with other costs like energy and property taxes. The leftover money could be used to help boost retirement savings.

Take charge of your health

Healthcare costs are increasing much faster than the rate of inflation.5 In retirement, it can be your biggest expense. If you’re not already doing so, adopt healthy habits by eating well, exercising regularly and seeing doctors for preventative care to manage this potentially major expense.

Work a few more years

If you’re willing and able, working longer can stretch your savings. Even part-time employment can improve finances. Consider phasing in retirement by gradually reducing your hours. A phased retirement frees up time to pursue a retirement lifestyle, but still provides a paycheck.

Saving for retirement early is always the best plan, but don’t let the past stop you from taking charge of your financial future today. Speak with a financial advisor to get started.

1Kirkham, Elyssa. “1 in 3 Americans Has $0 Saved for Retirement.” GOBankingRates. March 14, 2016. http://www.gobankingrates.com/retirement/1-3-americans-0-saved-retirement

2“IRS Announces 2017 Pension Plan Limitations; 401(k) Contribution Limit Remains Unchanged at $18,000 for 2017.” IRS. October 27, 2016. https://www.irs.gov/uac/newsroom/irs-announces-2017-pension-plan-limitations-401k-contribution-limit-remains-unchanged-at-18000-for-2017

3Campbell, Todd. “Is 70 too late to claim Social Security?” CNN Money. August 3, 2016. http://money.cnn.com/2016/07/24/investing/70-too-late-to-claim-social-security/

4O’Shea, Arielle. “How much should you save for retirement?” NerdWallet. May 19, 2016. https://www.nerdwallet.com/blog/investing/how-much-to-save-for-retirement/

5Lorenzetti, Laura. “Here’s Why You’ll Likely Pay More for Your Employer-Sponsored Health Insurance.” Fortune. June 21, 2016. http://fortune.com/2016/06/21/health-care-rising-costs/