How Late Is Too Late To Save for Retirement? 3 Things To Do Besides Panic
Written by
Vance Cariaga
Edited by
Cory Dudak
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The best time to start saving for retirement is when you enter the working world full-time, usually in your early to mid-20s. A report from the Milken Institute determined if you begin saving $100 a week at age 25, you’ll have more than $1.1 million saved up by age 65. That should be enough to carry you comfortably through your golden years.
Unfortunately, most Americans don’t follow that kind of plan — often because they get a late start on building their nest egg. This partly explains why the median retirement savings for Americans in their 60s is only $210,724, according to data compiled by Empower.
The main downside of starting a retirement savings plan later in life is that you miss out on the compounding effect of building savings over many decades. Financial experts will tell you it’s “never too late” to start saving for retirement. However, you are always better off starting as soon as possible.
If you are a late starter, there are ways to maximize your retirement savings. Here are three things to do instead of panicking.
Work Longer
The most straightforward way to build retirement savings if you started late is to delay retirement as long as possible. The longer you work, the more time you’ll be able to play catch-up with a 401(k) plan, IRA or other retirement account.
“The worst-case scenario is to run out of money when you’re elderly and re-entering the workforce is not an option,” said Nancy Gates, Lead Educator at Boldin, a financial planning platform. “People who start saving later in their career may consider working a few extra years to contribute more funds to their total, and give their money more time to grow before they begin drawing from it.”
Maximize Your Retirement Plan
Most Americans depend on 401(k)s to fund their retirements. If you’re getting a late start, then it’s especially important to maximize your contributions. In 2025, the annual 401(k) limit is $23,500 if you are younger than 50. Workers 50 and older are allowed an additional catch-up contribution of $7,500 for a total of $31,000. If you are 60 to 63, you get a catch-up of $11,250 for a total of $34,750.
If you can’t make the maximum contribution, then at least try to increase your contribution each year. Ben Joergens, Financial Empowerment Director at Old National Bank, recommended upping it by 1% each year — especially if your employer matches your contribution.
“Take advantage of any employer matching contributions — a perk that can significantly boost your retirement savings,” Joergens wrote in a 2024 blog. “For example, if your employer offers a 6% match, contribute at least 6% of your income to maximize this benefit.”
Expand Your Income Sources
Finding additional income sources is a good way to build a nest egg in a hurry — especially if the money you earn can go straight into a retirement account. Numerous high-paying side hustles are available to help you earn extra money, from training specialist and consultant to online reseller.
Another option Gates recommended is to invest some of your money into passive income sources such as a business or rental property. The recurring revenue you earn from these sources can be put toward retirement savings.
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Sources
- Milken Institute, “Shifting the Retirement Paradigm: Moving Toward Lifetime Financial Security“
- Empower, “The average 401(k) balance by age“
- Nancy Gates, Boldin
- Old National Bank, “It’s Never Too Late to Start Saving for Retirement: A Guide by Ben Joergens, Financial Empowerment Director“
