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Thinking About Retirement Too Late? What Do You Do?


Do you know of someone that’s just beginning to think about saving for retirement, but they’re already in their 50s? I actually hear about this scenario quite a lot.

Young Ignorance

I’m currently in my late 20s and I don’t know too many people my age that are talking about their retirement plans. They are beginning to make some pretty good money, but have no intentions of putting any of it into a retirement fund. After all, they have plenty of time, right?

While they may have over 40 years before they retire, they are forgetting the one essential element in retirement savings: compound interest. Money doesn’t grow too quickly, but when you consistently earn interest over 40 years, your small contributions can turn into one huge lump sum!

If, however, you wait to contribute until later, the money no longer has the proper time that it needs to grow into that huge amount! It’s best not to have young ignorance.

Financial Help For Your Children

There are a couple of other scenarios that inhibit retirement contributions for parents as well.

(1) Parents feel like it’s their responsibility to pay for their childrens’ college tuition. In order to achieve this, they really skimp on their retirement accounts until much later in life.

(2) With the sub-par economy, the recent grad is having trouble finding a job. So, back into mom and dad’s house…. Rather than throwing a bunch of money into the retirement accounts, mom and dad are now providing their young adult’s food and clothing.

Both of these scenarios happen all the time! Parents believe that it’s their responsibility to take care of their children until they are 23ish years old! This sounds very caring, but if the proper funding is not going toward retirement, guess what? …Your children will be paying for your care when you are older, which can be a tremendous burden. Do not leave this responsibility for you kids.

So How Do You Load Up Your Retirement Account Fast?

Just like any budget, you must look at both the income and the expenses of your household. If you increase your income and decrease your expenses, you’ll have tons of money to throw into that retirement ‘jar’.

Increase Your Income

This can be tough in your 50s and 60s. If you have a job, you most likely aren’t climbing the corporate ladder anymore, and you might even feel pressure from your boss to retire. So, in this environment, how could you possibly earn more income?

I don’t suggest that you go out and deliver pizzas or mow lawns next door (unless your situation is dire). Rather, you should consider your hobbies. Working at your hobby won’t really seem like work at all, and if you can get paid to do it, you just discovered your extra income! This could be as simple as making crafts, building model airplanes, painting, sculpting pots, buying and selling gold coins, or maybe you’re awesome at playing the piano. All of these hobbies can be turned into money-making ventures.

Decrease Your Expenses

If your retirement savings is quite low, you may just have to face the facts and come to the realization that you’re never going to buy that 60′ yacht of your dreams. It’s just not going to happen. Rather than having your pie-in-the-sky fantasies, maybe it’s time to downsize the house and put the equity into a safe, interest bearing fund.

Also, you may need to change your lifestyle a little. Instead of going to that $50-a-plate restaurant, you might want to pack a picnic basket with sandwiches and head to the beach! Hopefully, you’ll learn that your happiness is not dependant on an expensive meal. It’s all about the company you’re with and the memories you create.

Do you know of anyone that may need to alter their lifestyle in order to retire on more than a few cans of SPAM a week? What do you suggest they do?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. These are great suggestions. I will also add consider using what funds are set aside for income producing real estate. When I sat down with my mom while my dad was sick, I found out that she will lose his pension when he passes. She is not sure that her budget will sustain that hit so we plan to invest in income producing real estate with the current savings account monies to get 8-10% yield vs less than 1% to make up that loss.

    • If they can turn their earned income into passive income, that’s really the best option! You sound like a pretty great son! 🙂

      • How is passive income taxed differently than earned income?

        • As far as I know, it’s not taxed differently. The percent bracket depends on how much your total earning are for the year. Of course, with passive income, you most likely have your own business set up, which will allow you to write off expenses and your overall taxed income should be reduced.

  2. One thing that many people do not consider when adding to their income is opportunity cost. You may have several options to increase your income such as delivering pizzas, taking a second job, or monetizing your hobby. But, which one will pay the most based on the number of hours that you will have to dedicate to it? Is there a better option out there that will pay more? Are you picking the income producer that is the easiest and pays the least amount of money when there is a better use of your time in some other endeavor?

    • It’s not always about the most money though. If you are doing what you love and can survive on the income, then that is probably the best option. The number of dollars is secondary. But you’re right, it’s always a good idea to consider the opportunity costs.

  3. I think you hit the nail on the head. Saving for the future is really as simple as what you said: Try to bring in extra money and cut your expenses. If you are on track or saving early, you don’t have to stress about trying to make as much money as possible. But, as you noted, not everyone has that luxury. It is important to not get bogged down and focus on doing something as early as possible.

    • It really is simple in principle, but actually tucking away large sums of money can be tough. It takes some hard work and discipline. Luckily though, you are smart and are investing in your future now. By the time your 50, you won’t be worrying about retirement, you’ll already be living it! 🙂

  4. Great post Derek. Like others have said you hit the nail on the head. My parents have always been good with saving but they are working to ramp up their retirement assets and cash. They are doing the real estate plan. They just bought a second house and plan to have it paid off within the next 2-3 years. They also own some extra land. They don’t plan on using this money right now but if the needed to they could sell the properties and be just fine.

    • I do love real estate! They can pay off each house within 2-3 years and then bank all of the additional rent. Plus, they now have a very valuable asset that can be sold later! 🙂

  5. Unfortunately, I do know some people in this situation. 1 who is in his upper 50’s and has no nest egg and the other in his upper 20’s that has a mountain of debt and a lifestyle that is not allowing any movement on that debt. I’ve tried to give subtle advice and purchased some financial books for the younger friend but to no avail.

    I feel like i’m watching a slow motion train wreck where I know they will get run over but they refuse to get off the tracks.

    • It really is unfortunate isn’t it. You really want to help them, but if they don’t want to help themselves, there’s nothing you can do. Hopefully he doesn’t wake up (from his irresponsible ways) too late….

  6. I love the tip to make your hobbies work for you. My father in law recently retired so that he could focus on his woodworking hobby. He’s doing what he loves and getting paid for it!

    • That’s exactly what I’m talking about! Good for your dad-in-law!

  7. I learned early that if you make your goal reasonable and make savings a priority, you achieve your goal. I know I did!

    • Planning is a huge step in the process. Many people don’t have a plan and guess what?? They never experience the life that they expected in their retirement years.

  8. It’s all about the company you’re with and the memories you create. <— Man, I always try to tell my girlfriend this when she wants to go to the $50 a plate dinners!! LOL

    • Haha! Don’t worry, you’re not the only one that has trouble averting the lady from those expensive dinners…. 😉

  9. Well, it is not the youngsters are not thinking – but first they have to pay back student loans & mortgage.
    Believe you me, what the banks are charging you, is more that you can earn on a stock market.

    But the main thing – life is collection of experiences and many things are only fun when you do them young : -)

    • That is true, some kids are paying off their student loans, but I’m talking about those 20-somethings that go out and buy a brand new car, a big screen TV, and a boat for their weekend parties. These kids should definitely be putting some money toward the future rather than just lavishing themselves with the materials of the present.

  10. If you can manage to NOT be one of the 95% of people who give up either of the 2 industries I’m about to mention within 3 months of starting, both Internet Marketing and Muli-Level Marketing can provide a great passive income. But you have to persistent and patient.

    • Sounds like you’re on the hunt for some passive income! I wish you luck and hopefully you are able to live your dreams! I’d love to hear more about your business ventures if you’d like to shoot me an email. 🙂

  11. These are all great ideas! I agree with you about the hobbies being more important than the money earned. If you love what you do, your stress level will be less and you will be able to enjoy life even if the earnings might be less. If you are constantly fighting for money, money, money – the joy of the journey could be lost!

    • I couldn’t have said it better myself! Life is short so it’s better to enjoy your time rather than thinking about “money, money, money” (as you say 🙂 ).

  12. Put me down as one who didn’t overly think about retirement in my 30’s, much less my 20’s. I reformed in my late 30’s, and I’m now in a comfortable, but nowhere near satisfied state 🙂

    • Don’t you wish you could just go back and straighten your younger self out? I wish I would have been wiser when I was younger, but I’m still in my mid-20s, so I’m probably better off than most.

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