AARP's Advice on How to Save for Retirement


Planning for retirement should start when you get your first job, so even if retirement seems a long way off, now is the time to start.

Planning for retirement should start when you get your first job, so even if retirement seems a long way off, now is the time to start.

If you’re close to retirement and starting to panic about what you have saved, it’s never too late to work toward a savings goal. Frankly, you’re not alone: Nearly a third of age 55-and-up households didn’t have any pension or retirement savings in 2013, according to AARP.

“The worst thing you can do is throw up your hands if the number feels out of reach,” AARP says. “First: Save, save, save. Savers can double, on average, their nest eggs in the last decade or so of their working lives, thanks to the magic of compound interest.”

Here are some ways to save for retirement.

1. Set a savings goal

Your goal will be different from the goals of others and it should depend on where you live, your health and how long you expect to live.

Start by determining your retirement costs. They could be 80-100 percent of your current costs because, as EisnerAmper Wealth Advisors managing principal Dan Yu points out, most people don’t slow their spending for a decade or so after they retire. You may want to travel or invest in hobbies that cost even more than what you spend now.

People also live longer than they used to, with the fast-growing segment of the senior population being the 90+ age group, according to the U.S. Census Bureau. Give yourself the benefit of the doubt, and assume you will have a long life.

2. Earn more money

Simple, right? Actually, adding a bit of extra work doesn’t have to be difficult, with the availability of freelance and part-time work through sites such as, and More money isn’t just about increasing your paycheck, as you can also spend less.

Cutting expenses and increasing income is “the magic combination,” according to AARP.

Beyond the cliché “cut out your expensive cup of coffee,” (which, of course you should do if you’re one of the people who don’t brew at home), there are plenty of suggestions for how to cut expenses. Changes can be relatively easy, such as making the shift to public transportation, or more involved, such as moving to a less-expensive area.

3. Max out your 401(k) contribution

You likely know to divert enough of your paycheck to your 401(k) to get the match your employer offers. Beyond that, increase your capacity for a comfortable retirement by increasing your contribution to the maximum amount allowed, which is $24,000 for people 50 and older.

Your retirement tax bracket also matters when making plans.

“If you expect to be in the same tax bracket or a higher one, you could put some money into a Roth IRA or Roth 401(k) (where earnings are taken out tax-free in the future),” according to AARP. “But most people will retire into a lower tax bracket, so taking the tax deduction now may make the most sense.”

Doing so will help you avoid relying solely on Social Security although, if you’re past the point of being able to contribute to other retirement funds, AARP has suggestions for how to live off Social Security.

4. Make other investments

If you own a home, perhaps it’s time to buy another to rent out (if you don’t already own a home, check out these retirees who bought their first home as seniors). A rental property could support your retirement with a monthly income or a lump sum when you sell the place.

Bankrate points out these pros and cons of owning a rental:


  • Generates income each month
  • Tax advantages (e.g., depreciation)
  • Increasing rents over time
  • Ability to fix mortgage costs


  • Expenses and upkeep
  • Deadbeat tenants
  • Risk of empty units
  • Illiquid asset

If the headache isn’t worth the benefit, hire a property management company. It may take longer to pay off the mortgage, but you’ll still build equity over time.

It isn’t easy but by taking the initiative to plan for your future now, you can ensure yourself peace of mind and options throughout your retirement years.

Thanks to a recently started initiative called OregonSaves, all employees across Oregon will have access to a payroll deduction retirement savings program even if their employer doesn’t offer a retirement program. To learn more, visit