For many individuals approaching retirement, realizing that their savings may fall short can be a source of stress. The good news is that it’s never too late to take action. Careful planning and informed decisions can help you work towards securing a more comfortable retirement.
In this blog, we'll explore strategies for catching up on your retirement savings and provide practical steps you can take today.
Disclaimer: This blog is for informational purposes only and does not constitute financial, legal, or investment advice.
Before taking any steps, it’s essential to understand where you currently stand. Start by reviewing your assets, liabilities, income sources, and projected retirement expenses. This process can help provide clarity so you can start setting your smart financial goals.
Tax-advantaged accounts can be a valuable tool for boosting retirement savings. The IRS allows individuals aged 50 and older to make catch-up contributions, providing an excellent opportunity to save more as retirement approaches.
For 2025, individuals aged 50 and older can contribute up to $31,000 annually, including a $7,500 catch-up contribution. If your employer offers a matching contribution, it can be helpful to contribute enough to take full advantage of this benefit.
Those 50 and older can contribute up to $7,500 annually to an Individual Retirement Account (IRA), including a $1,000 catch-up contribution. This option is available for traditional and Roth IRAs, though Roth contributions are subject to income limits.
If you have a high-deductible health plan, an HSA allows for tax-advantaged savings. For individuals aged 55 and older, the 2025 contribution limit is $4,300 with a $1,000 catch-up contribution.
For High-Net-Worth Individuals (HNWIs), traditional retirement accounts may not be sufficient to meet long-term financial goals. As a result, many turn to additional strategies to supplement their savings.
Certain employer-sponsored retirement plans allow after-tax contributions beyond the standard annual limits. These contributions can later be converted into Roth IRAs, offering potential tax advantages. This strategy may be worth considering based on your overall financial objectives.
Specific investment strategies can help reduce tax liabilities while maximizing returns. In order to determine the most effective approach for your situation, it’s advisable to consult with a financial professional experienced in tax efficiency for high-net-worth clients.
An underfunded retirement plan may require adjustments to your investment approach. While taking on additional risk may seem appealing, balancing potential rewards with your risk tolerance and time horizon is crucial.
A diversified portfolio can help manage risk by spreading investments across asset classes such as stocks, bonds, and alternatives. Diversification aims to help reduce the impact of market volatility on your overall portfolio.
Periodic rebalancing can help ensure that your portfolio remains aligned with your long-term goals, especially as market fluctuations shift asset allocations. Investments carry risks, including the potential loss of principal, and past performance does not guarantee future results. That’s why consulting with a financial professional can be essential in determining what’s best for your investment portfolio needs.
Delaying retirement can be one of the most effective ways to help enhance your financial preparedness. By working a few extra years, you can:
While this may not be the ideal solution for everyone, it may be a practical option for those significantly behind on savings.
Generating additional income can help close the savings gap without requiring drastic lifestyle changes. Some income generation strategies to consider are:
Some individuals invest in income-generating properties to help create a steady cash flow during retirement. Depending on your interests and resources, this could include rental homes or commercial spaces.
Many consider part-time consulting or freelance work part of their past field. This may allow you to continue earning while enjoying semi-retirement.
Monetizing hobbies, such as photography, crafting, or writing, can be both enjoyable and financially rewarding.
Discussing any investment or income-generating opportunities with a financial professional to evaluate their suitability for your goals may be beneficial.
Cutting back on spending can free up additional resources to help bolster your retirement savings. You may want to consider the following:
Identify areas where you can reduce expenses without sacrificing your quality of life, such as dining out, travel, or luxury purchases.
For some, moving to a smaller home or a more cost-effective area can significantly lower living expenses, allowing you to allocate more funds toward savings.
As you approach retirement, safeguarding your assets becomes increasingly important. The two most common strategies to achieve this include:
Ensure you have adequate coverage for health, long-term care, and other potential risks. This may help protect your savings from unexpected expenses.
Work with a financial professional to establish or update your estate plan, helping ensure your assets are distributed according to your wishes while minimizing potential tax implications.
Navigating the complexities of retirement planning can be challenging, especially for high-net-worth individuals. A financial professional experienced in wealth preservation strategies can provide valuable insights and help you make informed decisions.
At NJM Wealth Preservation Strategies, we focus on helping affluent clients explore retirement strategies tailored to their unique financial situations. Our experienced team will work with you to help support your long-term goals.
If you’re ready to get started, schedule a complimentary consultation with us today.
The amount you should save depends on your retirement goals, lifestyle, and expected expenses. A common rule of thumb is to save at least 15% of your pre-tax income annually, but it's essential to tailor this based on your specific needs, desired retirement age, and any additional sources of income.
It's best to start saving for retirement early to take advantage of compound interest. Even if you're later in your career, it's never too late to start saving, but the earlier you begin, the more time your money has to grow.
Popular retirement investment options include 401(k) plans, IRAs, mutual funds, stocks, and bonds. Your strategy should depend on risk tolerance, age, and when you plan to retire. Diversifying your investments is also important to help minimize risk. Working with a financial professional can be beneficial in determining which investments are best for you.
Many experts recommend planning for about 70-80% of your pre-retirement income annually. However, this can vary based on your lifestyle, health care needs, debt obligations, and whether you plan to travel or take up hobbies that require funding.
Healthcare costs can be one of the largest expenses in retirement. Consider enrolling in Medicare when eligible, but also look into supplementary health insurance or Health Savings Accounts (HSAs) to help manage costs. It's important to factor in expected and unexpected medical expenses when planning for retirement.
Being behind on retirement savings is not the end of the road. By taking proactive steps, such as maximizing contributions, reassessing investment strategies, and exploring additional income opportunities, you can work toward a more secure and fulfilling retirement.
Every decision you make today helps shape the retirement you envision. Start by assessing your current financial situation and consulting trusted professionals to create a plan tailored to your needs.
Disclaimer: This blog is for informational purposes only and does not constitute financial, legal, or investment advice.