SURVEY SAYS: Too Late for Retirement Saving?

October 6, 2014 ( - Retirement plan designs to encourage people to save for retirement are getting a lot of attention, but is there an age at which it is just too late?

Last week, I asked NewsDash readers if they think there is an age at which it is too late for individuals to start saving for retirement, and whether they have any tips for strategies late savers can use to try to “catch up” on retirement savings.

Sixty-eight percent of respondents were for plan sponsors, 10.6% are advisers/consultants, 19.2% work for TPAs/recordkeepers/investment managers and 2.1% are attorneys.

Asked when they started saving for retirement, 39.6% of responding readers indicated they started saving for retirement between ages 18 and 25. More than 35% were ages 26 to 30; 8.3% were ages 31 to 35; 6.3% were 36 to 40; 6.3% were 41 to 45; and 4.2% were 46 to 50. (Numbers may not add to 100 due to rounding.)

Assuming an individual earns a “middle-class” income and wants to retire between the ages of 65 and 70, a large majority of respondents (81.3%) said it is never too late for an individual to start saving for retirement, even a small amount of savings can help. More than 4% of readers think age 35 is too late to start saving for retirement, while 2% said age 40 is. More than 4% selected age 45 as being too late to start saving for retirement, and 2% selected age 50. No one chose age 55, but 6.3% chose age 60.

Most of the readers who shared tips for late savers to “catch up” their retirement savings focused on spending less, saving as much as possible, and possibly retiring later. Some shared tips unrelated to retirement saving, such as the one who said: “Find a ‘sugar momma’ or ‘sugar daddy’!” One of the ideas that stuck out to me was, “If you think it is ‘too late’ to start saving, then determine what your retirement income might be based on what you have, and try to live on that for several years before retirement (and save every penny you make over that amount).”

Readers’ tips included:

  • LIVE UNDER YOUR MEANS-Invest the rest!
  • Anyone can show the math facts of the later you start saving, the more you need to save each year to create a nest egg. But the real problem is the longer you wait, the more you have to reinvent yourself. No late saver wants to acknowledge they've been living the high life, but they HAVE!. Everyone's budget HAS TO have savings! If they haven't been saving, then they've been overspending and living the high life. It would be very difficult for someone to change their lifestyle to savings rather than spending. The best advice is the simplest advice, but the simplest advice is the hardest to follow - spend less than you make! If you can spend a lot less, you'll be blest as life goes on. What's even more amazing is the more you save, the less you are spending. Less spending means you need less money in retirement to maintain your standard of living. And it means less saving is needed. Just save more and everything works out.
  • Budget your personal expenditures. Limit dinners out during the week, bring your own coffee & plan inexpensive weekend activities. This will enable you to contribute at a higher percentage.
  • Put the maximum amount in each year as long as you can. Stay the course and perhaps retire later than originally planned.
  • If you think it is "too late" to start saving, then determine what your retirement income might be based on what you have, and try to live on that for several years before retirement (and save every penny you make over that amount).
  • It's about choices and making saving for retirement a priority. We have a lot of luxuries that we don't "need". If someone wants to save for retirement, they can make it happen.
  • Cut down on expenses, save as much as possible in a retirement plan and outside of the plan, consider using leverage in a real estate investment where others pay your mortgage, take steps now to extend your working lifetime which may require a career change to a position that accommodates the abilities of a senior.
  • Retirement income sufficiency is a function of retirement savings and longevity. If it's too late to significantly impact savings, you can always impact longevity by taking up smoking and drinking heavily.
  • Saving as much as possible, even late, helps lower your current spending in addition to growing your retirement savings. That means your target is lower!
  • Contribute, at least, the amount your company matches. If your dependents start aging off insurance resulting in lower premium, increase your contribution by same amount.
  • Find a "sugar momma" or "sugar daddy!"
  • I guess cut out all that eating out and leasing cars. Buy a car and keep it so you can save the extra for retirement.
  • Contribute the maximum allowed and take advantage of companies and people who can help you with investments to make the most of your dollar.
  • Participate to the highest % possible and definitely in the catch-up allowance if at all possible. Never ever take a withdrawal - loan, hardship, or 59 1/2 early withdrawal. Leave everything in the account to grow to the best ending balance possible. Cut down on "non-needs" in order to lessen the pain of 401(k) contributions. Everyone spends on things they really do NOT need - eliminate that and put it in the 401(k).
  • Start saving the maximum allowed by law as soon as you may (not can!) Consult an adviser you respect and trust, even if it is someone completely unconnected with your plan.
  • Give up the unneccesaries and save as much as possible. We can all live on less than we think.
  • Make more money, it takes a lot of income
  • Eliminate your debt and consider a reduction of your current standard of living to save more. You might as well get used to it rather than having an extremely rude awakening in your 70's or 80's.
  • Buy lottery tickets! No, just kidding. 🙂
  • Late savers can take advantage of the tax savings by contributing to a retirement savings plan on a pre-tax basis. This can be a big advantage when the kids are all grown and your mortgage is paid and your tax exemptions are little or none. They can take advantage of the reduction on gross earnings and saving for retirement all in one.
  • Quit y'er ()itchin', hunker down and plug away. 'scuse my PC faux pas.
  • Put every dollar you can spare in, Max out on the annual limit and the annual catch up contribution. invest aggressively, think 2nd job to support your retirement contributions and eat lots of peanut butter and Mac & Cheese to save money. Carry your lunch, use coupons to help save every penny you can.

In verbatim comments about saving for retirement at any age, readers shared more admonitions and tips, as well as ideas for avoiding the “too late” issue altogether, such as “teach high schoolers to save the second they get their first job” and “I think it would help if contributing to your 401(k) plan was mandatory, just like taxes.” Editor’s Choice goes to the reader who said: “I would never say it's ‘too late,’ you should just give up. After all, what's the alternative?”

A big thank you to everyone who participated in our survey! 


Pay yourself first even if it is 1% to start

Spend less than you make.

start early!

Even a small monthly income from savings can help with incidentals. Social Security will not be enough. Roth IRAs can also be helpful.

Its good discipline.

If we could teach high schoolers to save the second they get their first job (even if it is only a tiny bit), we wouldn't be having this discussion at age 60.

The kind of retirement one will have is dependent on the age at which they start saving and continue to save for retirement, but any amount can be more beneficial than nothing.

Start saving at 10% and raise it to 15% of all income beginning with your first job. Invest 100% of your savings in stocks until you are in your forties and then begin to reduce equity exposure.

Verbatim (cont.)

Hindsight is an amazing thing.

It's never too late to start saving, but that doesn't mean you will actually be able to retire. You might be in retirement age, but still working 'cause you have to pay your bills.

I think it would help if contributing to your 401(k) plan was mandatory, just like taxes.

Starting small and increasing slightly each year makes your dollars grow without hurting your budget. If you live paycheck to paycheck it seems impossible, but it is doable with a small amount.

I would never say it's "too late," you should just give up. After all, what's the alternative?

Any amount you accumulate helps and saving at any age helps to establish an awareness and a routine of responsibility in your finances.

I selected "It's never too late...." but my real opinion is that the day AFTER you retire might be awfully late to start!

Start now, no matter how old you are!!!!

Start as early as possible to harness the power of compounding.

Live below your means and save the rest. It's true your entire life -- in retirement as well as in your earning years.

Save as much as you can for as long as you can and DON'T BORROW from your 401(k) unless you will die without the money.

I am a firm believer in saving for retirement; whether you start early in life or not, SSI is not going to be enough to support a comfortable lifestyle upon retirement.

Remember the Disney cartoon version about the tale of the ant and the grasshopper. Happy ending. Eerily familiar to today. All too soon, the ending will be quite different. The ant will survive; learning to fiddle - on the side of course.

It is never too late to save. Be passionate about saving and think long term. Quit buying foo foo stuff today that you don't need. Only buy necessities. Get your retirement built up.

Compounding is a wonderful thing and unfortunately many people don't understand that saving as little as $10 a week starting in your 20s can go a very long way.


NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Asset International or its affiliates.