7 Simple Ways Baby Boomers Can Catch Up on Retirement Savings

Save more for retirement by following these simple tips.

Listen up, baby boomers. More than half of adults 55 and older have less than $50,000 in retirement savings, and about one-third haven't even started saving for retirement. That means many of you have a lot of catching up to do before you punch the clock for the last time.

Some boomers are fortunate to have a job with a pension. Those without that guaranteed source of income or any savings will be forced to survive on Social Security benefits or the support of their children. In some cases, baby boomers simply might not be able to retire at all.

If those scenarios don't seem appealing to you, follow these expert tips to catch up on retirement savings.

Have a Picture of the Retirement You Want
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Have a Picture of the Retirement You Want

Adults 50 and older can take advantage of IRS provisions to make catch-up contributions to retirement accounts — an extra $6,000 annually to a 401k and an extra $1,000 to an IRA. Such contributions are a great way for boomers to save more for retirement if they have fallen behind. But all of the provisions in the world won't help unless you're motivated to save.

Because the future is murky, many people find it difficult to get excited about saving for retirement, said Joe Sicchitano, head of wealth planning and advice delivery at SunTrust Bank. It's easy to delay setting aside money today when you don't have a clear picture of how you're going to benefit down the road.

Figure out what you want in retirement. Don't just rely on a rule of thumb for how much money you need to set aside or some number from a retirement calculator, as it's difficult to emotionally invest in a number, Sicchitano said. Instead, imagine your retirement lifestyle, and then find an actual picture that represents it.

Put the picture in your wallet, credit card sleeve or somewhere else where it will be a constant reminder that the more money you spend today, the more difficult it will be to realize your vision of retirement. "The whole point of that is to bring the future into the present to make better decisions today," Sicchitano said.

A visual reminder can help you get excited about what's important and motivate you to save more for retirement, he said.

Beware: 10 Signs Your Children Will Have to Take Care of You in Retirement

Reinforce Your Savings Habit Through Automation
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Reinforce Your Savings Habit Through Automation

Once you find motivation to save, make saving a habit. Don't rely solely on good intentions because life gets busy and it's hard to maintain focus, Sicchitano said. To reinforce the savings habit, you need to automate it, he said.

Maximize contributions to your 401k or workplace retirement plan. If you don't have access to a workplace plan, save on your own with an IRA or other individual account. Schedule automatic transfers from your checking account on payday so you fund a retirement account before you can spend the money.

If you're already contributing to a workplace or individual retirement plan, increase your contribution. "If you get a raise, bank the raise," Sicchitano said. "Take whatever the difference your raise is and send it to a savings or investment account."

Set a reminder on your smartphone or scribble a note to yourself right now to automate your savings.

Find Room in Your Budget to Save More
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Find Room in Your Budget to Save More

You can't put more into retirement savings if you don't control spending. "Finding space in your budget is key," Sicchitano said.

According to a recent GOBankingRates survey, 55 percent of Americans spend most of their money on guilty pleasures, such as fast food, alcohol, tobacco and gambling. Your discretionary spending is the area over which you have most control, Sicchitano said. When you reduce your spending on guilty pleasures, you can boost your health and accumulate more money to stash in retirement savings.

You also should tackle debt before retirement. "Debt is an expensive real problem you have on a monthly basis," said Terry Dunne, managing director of automatic rollovers at Millennium Trust, a financial services company based in Oak Brook, Ill. By eliminating debt quickly, you free up more room in your budget to save for retirement. Plus, you'll need less money in retirement to cover those monthly debt payments.

If you need more motivation, think about how much your money would grow if you put it into retirement savings instead of spending it. Sicchitano said he created a spreadsheet for a client to show him that the $1,000 he wanted to spend on a new TV would grow to $3,500 by the time he retired if he invested it. "All of the sudden, that TV doesn't look so good anymore," Sicchitano said.

Read: 5 Debts You Need to Tackle Before You Retire

Go Public About Your Savings Goal
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Go Public About Your Savings Goal

Need even more motivation to save? Go public with your savings goal, Sicchitano said. You don't have to announce to the world that you're trying to save a certain amount. But if you challenge a few friends or family members to see who can squirrel away the most cash each month, the competition might motivate you to save more for retirement.

In other words, add a little fun to the otherwise boring task of setting aside money for the future. "Saving is like eating Brussels sprouts," Sicchitano said. "Even Brussels sprouts are delicious if smothered in butter and bacon."

Turning saving into a game not only makes it more enticing but also makes you accountable to others. "If you're public about it, that pressure can be positive," Sicchitano said. "You feel the pressure to deliver on what you've gone public about."

Downsize Before You Retire
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Downsize Before You Retire

Don't wait to downsize to a smaller home in retirement. Of course, selling your house isn't the simplest way to catch up on retirement savings, but it can have a big impact on the amount you set aside over the next several years. You might even find that life actually gets simpler after moving.

Dunne, who is 60, said he and his wife moved recently from a four-bedroom home into a smaller townhouse. According to Dunne, the townhouse is about three-fourths the size of his old home, but their property taxes dropped by two-thirds, and insurance costs were cut in half. They also donated a lot of furniture because they didn't need it for the smaller space. The donation earned them a charitable tax deduction.

Dunne said he still plans to work for several years, but he's benefiting from the reduction in housing costs now. Plus, it's a new home, so there aren't frequent maintenance costs. And he doesn't have to take care of a big yard. "I thought it was a great event when I gave away my lawnmower," he said.

Related: 5 Smarter Ways to Save For Retirement When You're Behind

Limit the Impact of Taxes on Your Retirement Savings
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Limit the Impact of Taxes on Your Retirement Savings

Another way to catch up on retirement savings is to spread your money across different types of accounts to reduce the tax hit when you withdraw it. Withdrawals from various types of accounts are taxed at different rates. "Why throw that money away in taxes if you don't have to?" asked Neal Ringquist, executive vice president of Retirement Clearinghouse, a provider of retirement savings services in Charlotte, N.C.

Contributions to a 401k offer an upfront tax benefit because the money comes out of your paycheck before taxes, which reduces your taxable income. If you're behind on retirement savings, don't bypass this tax benefit. "You're compounding dollars that would otherwise be taxed," Ringquist said. "You need every dollar you can get."

Withdrawals from a 401k in retirement are taxed at your income tax rate, which currently can be as high as 39.6 percent. You might be able to reduce your tax bill if you stash some savings in other types of accounts, such as a Roth IRA or a taxable brokerage account, Ringquist said.

You can't deduct contributions to a Roth IRA, but withdrawals are tax-free in retirement. And investments in a brokerage account are taxed at the long-term capital gains tax rate — which is no higher than 15 percent for most taxpayers — as long as you hold them for at least one year. Saving some of your retirement money in these types of accounts can reduce the tax hit when you withdraw it, which means you get to keep more of the money you worked to save.

Delay Your Retirement
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Delay Your Retirement

Some boomers will find there is only so much catching up they can do. The better option for these folks might be to work a few more years. "There certainly isn't anything set in stone that they have to retire at 62, 65 or 70," Dunne said.

Delaying retirement offers two benefits. For starters, it gives you more time to build a nest egg. It also reduces the period of time you'll need to rely on retirement savings. "It delays the day where you're actually pulling money out of the portfolio," Sicchitano said. "Every year you delay it, your portfolio grows."

Delaying retirement might not seem ideal. But it's better than not having enough money to get through retirement and being forced back into the job market at an age when it might be tough to get hired.

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