By Lucy Lazarony, Next Avenue

Many Americans in their 50s don’t have nearly enough savings set aside for retirement. How bad is the shortfall?

According to Prudential’s 2024 Pulse of the American Retiree survey, with just a decade until the traditional retirement age, 55-year-old Americans have less than $50,000 in median retirement savings. Prudential says that is “significantly short” of the recommendation to have saved eight times one’s annual income by that age.

The Bureau of Labor Statistics estimated in June that the median annual wage for U.S. workers aged 55 and older was $62,244. Eight times that amount is $497,952.

How can stragglers build up their retirement savings? What moves should they make in the next 10 years or more to get ready for retirement? Here’s what financial experts had to say.

1. Estimate your retirement spending costs. How much will you need to support yourself in retirement? Start by establishing these costs.

“Put numbers to your retirement,” says Jim Blankenship, a Certified Financial Planner at Blankenship Financial Planning in New Berlin, Illinois. “Develop your spending plan (or budget, call it what you will) that you’ll need in retirement. By doing so you can begin to add clarity to your income needs in retirement, and this can drive your savings activities.”

2. Evaluate your future income. How much and what kinds of income can you expect to receive in retirement? Make a list of all your expected income sources.

“Get real numbers for your expected Social Security, pensions, annuities, et cetera, as well as any other income you might have available in your retirement years,” Blankenship says. “Comparing these sources to your income needs will put clarity to how much you’ll need to save to make up the difference.”

3. Choose a retirement date. Decide on a date when you believe you can realistically retire.

“Put a number on your expected retirement date,” Blankenship says. “It may be far off at this point, but putting down the number will give you a goal to aim for. It might not happen exactly as you initially planned, you might need to work a year or two longer, or illness might move the date closer. Having a date in mind just helps to clarify the whole process.”

4. Save more. If you are below the savings target necessary to live as you wish in retirement, increase your savings by as much as you can. Utilize all the retirement vehicles available to you.

“Provided that you have already set aside funds in an emergency savings account, you should maximize your contributions to retirement vehicles such as 401(k), 403(b), 457(b), IRAs and other tax-advantaged plans,” says Jennifer Bush, a Certified Financial Planner with MainStreet Financial Planning in Los Gatos, California.

“In company retirement accounts, make sure you are contributing enough to get the full company match, if available,” she adds. “Don’t leave free money on the table! There are catch up contribution amounts allowed for those over 50, so take advantage of this if you can. If you are already maximizing these contributions, you can open up a taxable brokerage account at a low cost custodian like Vanguard and continue to save. Don’t just save a little more for retirement, really make an effort to bolster your savings.”

“Save with both hands. Save till it hurts,” Blankenship says. “Start now, putting aside all you can spare from your day-to-day expenses.”

5. Review your spending. Now is the time to re-evaluate your spending habits and find more money to save for retirement.

“Review and reduce discretionary spending to free up more money for savings,” Bush says. “Negotiate with your vendors and shop around for the best deals. Did you know you can call your phone/cable/internet provider and ask for specials? Do you shop your car insurance every few years to see if you have the best price for the coverage you have? Are there monthly or annual subscriptions you are paying for that you don’t use?

“If you don’t track your spending, there are free or low-cost apps out there and they are worth it to help you be intentional on how you are spending your hard-earned dollars. Every dollar saved now can significantly impact your future financial security.”

How soon do you want to retire? If you only have a decade or more for building up savings, you’ll need to make some spending cuts.

“If you only have 10 years to save, and your money only has 10 years to grow, you will have to make some sacrifices,” says Chris Chen, a Certified Financial Planner at Insight Financial Strategists in the Boston suburb of Newton, Massachusetts. “Now may be a good time to review your spending and eliminate what does not serve a purpose or bring joy. The spending you save can be contributed to your retirement account.”

6. Work longer. One way to bolster your retirement savings is to put off retirement for a few years.

“Consider working a few extra years,” Bush says. “Delaying retirement can provide more time to save and reduce the number of years your savings need to cover. You can even retire from your stressful full-time work to something more rewarding and continue working part time in your retirement.”

7. Start downsizing. A great way to free up cash for retirement is to downsize your home or car.

“If you were planning to downsize or reduce spending in retirement, maybe you can start to transition right away,” Chen says. “If you are over 55, you may be an empty nester and may not need as much space. Downsizing might generate savings, or even cash if you own your home. That cash can be put to work and contribute to retirement also.”

Consider cleaning out the attic, basement and garage and sell extra items.

“Sell items that cost you money but provide little benefit,” Blankenship says. “Surplus clothing, tools you no longer use, sporting goods and extra vehicles that only take up space are good examples. And of course, you should consider selling things you simply do not use much anymore. That boat you bought a few years ago that you only took out on the lake twice last year, for example. These things might not bring in much money when sold, but by selling them you have some value from them and they’re not costing you money anymore, either. And you’re freeing up space.”

8. Hold off on Social Security. Postponing the day you begin collecting Social Security will help to increase your benefits. Waiting until age 70 will maximize Social Security benefits that you receive.

“Be really careful about taking Social Security,” Chen says. “It is likely to be your major source of income in retirement. To the extent possible, take it at 70 to maximize your benefit. This will make a world of difference in retirement. That may mean postponing retirement until 70. If you can swing it, it gives more time for your savings and investment to work for you and increase your standard of living after 70.”

9. Manage cash assets. Be smart with your cash by investing in money-market accounts and CDs and receive a good return.

“If you have funds outside of retirement accounts, make sure you are taking advantage of the higher rate environment we are in at this time,” says Brandon Gregg, a Certified Financial Planner at BBK Wealth Management in Lafayette, Indiana. “A 4% to 5% rate on money markets and CDs are an easy way to grow your safe money. Once you’ve built up a good emergency fund, it may make sense to take excess and invest in Roth accounts or taxable brokerage accounts to seek higher return potentials over the next 10 years until retirement.”

10. Pay off debt. Consider debt as a strain on your finances and make moves to pay it off as quickly as possible.

“Eliminate consumer debt quickly,” Blankenship says. “Any credit card balances, auto loans or revolving lines of credit should be paid off to reduce this drain on your income.”

11. Look for additional sources of income. Take on more work and reap extra income. What kinds of work can you do in addition to your regular job?

“If there are other sources of income that you might undertake, such as a second job, rental income or some other sort of side-gig, explore and exploit these to help increase your savable income,” Blankenship says.

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