I’m 63, have no retirement savings, and rely on Social Security. How can I start saving? Is it too late to start investing “so late in the game”?

I’m 63 and have no pension, just social security benefits. How can I start saving? And where can I start investing this late in the game?


Saving for retirement is definitely easier and more impactful the earlier you start, which you seem to understand. The longer you wait, the less time you have to save money. Plus, the compounding effects of interest, dividends and growth have less time to work for you.

Regardless of what time you start, however, I don’t like the idea of ​​categorizing it as “too late” overall. I’m afraid that if someone thinks it’s just too late to start saving for retirement, it’s easy to think it’s not worth the planning at all. This part is not true and believing it will leave you worse off.

Yes, you need to be realistic about your retirement expectations, such as when you can afford to retire or what kind of lifestyle you can maintain. But that doesn’t mean you can’t do anything to improve your retirement.

A financial advisor can help you identify and understand retirement income strategies.

start saving

Start saving to plan for your retirement.

Start saving to plan for your retirement.

If someone starts saving at age 63, it’s a safe bet that they should save whatever they reasonably can. I can’t say how much that means to you because I don’t know you or your situation, but seriously think about what that amount would be. You still need to eat, pay your bills, and have a life. But find an amount you can set aside and commit.

An added benefit of going through this exercise is that you can find ways to cut spending from your budget. If you can get used to living on a small budget before you retire, it will make your transition easier and more financially viable.

Are you likely to accumulate a large savings balance when you retire? No, but it will be more than the $0 you’ve saved now. I’m going to give you an example. Let’s just assume that you will max out an Individual Retirement Account (IRA) each year. This represents $7,000 per year since you are eligible for the catch-up contribution for those aged 50 and over. Let’s say you work until age 70 and ignore potential contribution limit increases.

Over the next seven years, you will have saved $49,000. Depending on how you invest and the growth rate of those investments, your account could grow beyond that. For example, at an annual growth rate of 3%, your ending balance could reach $53,637. With a higher annual growth rate of 9%, your balance could reach $64,403.

Are any of these amounts enough to send you on a European river cruise every year? No. Would having so much money at your disposal provide you with an extra layer of security? Yes.

So no, it’s not too late to start.

Plan for other income

Regardless of what you commit to saving now, your savings alone are unlikely to sustain you. I’m not saying that to discourage. In fact, I say this so that you don’t get sidetracked or frustrated with your progress and give up. Instead, consider any amount of savings you accumulate in the future as an improvement over where you are today.

Then think about other sources of income you might have in retirement.

Calculate social security

Let’s start with Social Security, because chances are you’re covered, and if you are, that’s going to be the biggest source of income you’ll have when you retire. You have to make the most of it. This may mean waiting as long as possible to deposit, so you can take advantage of delayed credits.

Here’s how it works:

For each full year after normal retirement age that you wait before claiming, up to age 70, your monthly check increases by 8%. Looks like you were born in 1959. If so, your normal retirement age is 66 and 10 months, and if you wait until age 70 to claim it, you’ll get 25.3% more . In addition to this, your Social Security benefit provides some protection against inflation due to the annual cost of living adjustment.

While I certainly think there’s a lot to be gained by waiting, and you should think about it seriously, don’t just assume you should wait until 70 and certainly don’t make that decision based on what I said here alone. Current financial need, health issues, or your family history may provide good reasons to apply before this date. The point I want to make here is that Social Security is probably a very important component of your retirement, and you should think seriously about your deposit strategy.

Consider part-time work

Consider working part-time in retirement.

Consider working part-time in retirement.

If you are able, you might also consider planning a non-traditional retirement. Earnings from a part-time job coupled with your Social Security benefits might be all you need to live comfortably. This will definitely add to your savings.

More retirees are opting for this type of arrangement than previous generations. Often it’s not even for financial reasons, but to have social interaction and a sense of purpose.

What to do next

Be realistic about what starting now means for your retirement lifestyle and consider these options for funding your retirement.

Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers readers’ personal finance and tax questions. Do you have a question you would like answered? Email [email protected] and your question might be answered in a future column.

Please note that Brandon does not participate in the SmartAdvisor Match platform.

Investment and retirement planning advice

  • If you have questions specific to your investment and retirement situation, a financial advisor can help. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool connects you with up to three financial advisors who serve your area, and you can interview your matching advisors for free to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, start now.

  • When planning retirement income, keep an eye on Social Security. Use SmartAsset’s Social Security Calculator to get an idea of ​​what your retirement benefits might look like.

Photo credit: ©iStock.com/katleho Seisa, ©iStock.com/Edwin Tan

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