I’m 61 and Haven’t Saved Anything for Retirement. What Do I Do?

Investing, Retirement Planning
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ask-anisha

I am 61, and I just opened a 401(k). I would like to know if this is the best thing for me. I would like to retire at 66 and would like to have some money. I am not very investment-savvy and don’t know what to do. Right now, I now put $75 in my 401k every week. I need help, thank you.

-RS

Hi RS,

Thanks so much for writing in. The first thing you can do to reach your goal is to put as much money as you can into your retirement accounts – unfortunately, $75 a week probably won’t cut it. Try to gradually increase the amount that you’re saving, if possible. Up your contribution by $5 for one month, then $5 the next, and so on.

You might also have to lower your expectations. It’ll be really difficult for you to retire at 66 if you’ve only started to save now. If you contribute $75 a week and your retirement savings grow at 8% (which is a pretty high estimate), you’ll have around $22,000 at age 66. It’s hard to live off that amount for just a year or two, let alone the rest of your life. I’d plan for working past 66 or drastically increasing your contribution. This is a really good article on what to do if you’re just starting to save for retirement.

Also, make sure your 401(k) has the lowest fees possible. My colleague Joanna writes in this article how to go about checking and then lowering the cost of your 401k.

Finally, I’d recommend posting this question on our Ask an Advisor platform, where certified financial planners can take a crack at it. This is a really tough situation, but it’s great that you’re facing the problem head-on instead of ignoring it.

Good luck!
Anisha