Getting a Late Start?

Everyone knows that time is the retirement saver's greatest friend-the longer you have to invest, the more time your money has to potentially grow. But maybe you've put off saving for retirement and now find yourself approaching 45 or 50 or older, and are afraid it may be too late to do anything. Don't panic. Just because you're getting a late start doesn't mean that you can't make solid progress toward a retirement goal. This article can help you find ways to save more and strategies to help you save more intelligently.

Get started now!
First of all, don't waste time complaining or apologizing for not doing more in the past. Get started today and do what you can. If you do nothing, you'll end up with nothing. If you start today, you can at least have a foundation for your retirement. You may not have as much in 10 years as you would have if you had started saving at age 25, but doing something is always better than doing nothing.

Make the most of tax-advantaged plans
If you have access to a retirement plan at work, make sure you take full advantage of all the tax benefits it offers. If possible, contribute the maximum amount allowed ($15,500 in 2007), or at least enough to get the full amount of matching contributions. If you're age 50 or older, you can save an additional $5,000 in 2007 as catch-up contributions. Participants in 403(b) and 457 plans may have additional catch up amounts available to them.

After you've put as much as you can into your retirement plan, look into other savings plans you might be eligible for, including traditional and Roth IRAs.

Cut back on some expenses
To help find more money to invest, take a look at your current expenses. What are you willing to give up today to make an investment in your future financial security? There are some obvious give-up possibilities-the gourmet coffee, lunch out, dining out, paying off credit card debt. Dig deeper to find more-you might consider:

• Raising the deductibles on your homeowners and car insurance
• Cutting back on your cable and/or Internet service
• Finding a cheaper cell phone plan
• Giving up the gym membership
• Keeping your car longer
• Reevaluating your life insurance needs to see if there are cheaper alternatives
• Selling some of your treasures that you no longer want or need

Invest the money from these give-ups for your future. You don't have to give up all of your life's luxuries–you just need to make some adjustments. Five dollars here, 20 dollars there–it all adds up.

Invest more aggressively
With limited time to accumulate a lot of money, you may need to step up your investment strategy a bit. Review your current portfolio's overall rate of return, and consider allocating a larger percentage of your assets to stock investments with a greater potential for return. This may expose you to greater volatility, but a portfolio that is invested too conservatively risks not keeping up with inflation. If you're getting a late start on saving for retirement, you may need to accept a little more risk in order to reach your goals.

Rethink your retirement goals
Maybe your dream retirement of a luxury house at the beach and an estate in the country needs to be revised in more realistic terms. And maybe you delay retirement a few years to give yourself more time to accumulate more money. The longer you work, the more money you can save and the fewer years in retirement you'll need to finance. You can still have a comfortable retirement, even if you need to revise your dreams a little. Working during retirement-at least part-time-is also an option as another potential source of income.

Monitor your progress
Once you have a plan in place, check in on it at least once a year to see how you're doing, and make adjustments as necessary. Keep at it. Even though you may have gotten a late start, it's never too late to make a difference. Make the most of the time you do have.

Check out other articles and FAQs on this site for more ideas on saving and investing. You may also want to consult with a professional financial advisor for more tips.