My Uncle Dale always said that you have to start saving early. And I did. Like a good little kid, I opened a savings account. I saved all my money from odd jobs like crawfishing, candy selling, and babysitting. I saved up around $2000 by college and thought I was super responsible but that disappeared into college funds in a hot minute. Then saving was impossible for me for a long time because I had so many bills to pay. So if you are late to the savings party, how do you catch up? Well, Jean Chatzky and Dr. Michael Roizen provide lots of great financial catch-up strategies in their new book, AGEPROOF: Living Longer Without Running Out of Money or Breaking a Hip.
In AGEPROOF, TODAY Show financial expert, Jean Chatzky, and the Cleveland Clinic’s chief wellness officer, Dr. Michael Roizen, explain the crucial connection between health and wealth. They provide readers with tactics, strategies, and know-how to live longer, healthier, more lucrative lives- and that is something we could all benefit from. Chatzky and Roizen provide a plan for both financial independence and biological strength with action steps to get you there. Today, I am happy to be able to share an excerpt from Chapter 11: Making Up For Lost Coin. It has some good pointers for getting past the problem of saving late with some financial catch-up strategies. The book is available at your local book seller or you can order it from amazon. I have included my affiliate link below for your convenience.
Financial Catch‑Up Strategies:
Excerpted from the book AGEPROOF by Jean Chatzky and Michael F. Roizen, MD. Copyright © 2017 by Jean Chatzky and Michael F. Roizen, MD. Reprinted with permission of Grand Central Life & Style. All rights reserved.
You hear this advice over and over: if you start saving for retirement at the age of 20, you’ll be set for life. That’s because the power of compound interest can take your measly savings as a young adult and turn it into millions by the time you’re ready to retire.
Great advice. IF YOU’RE 20!
But what if you didn’t get (or take) that advice when you were younger? What if you’re now 40 or 45 without much retirement savings, and you don’t want to work at Taco Bell until you’re 93? (Not that there’s anything wrong with Taco Bells.) What if you’re in any kind of less-than-optimum financial situation—like climbing out of debt or digging out from bankruptcy? Is it too late to save more, spend less, or make money?
It’s not. While you can’t technically make up for lost time when it comes to the exponential rate of growth of that compound interest, you can strategize about the best ways to erase mistakes and make that murky-as-mud financial outlook look clearer than Caribbean blue.
In this chapter we’re going to take you through some very common financial do-over situations—that is, tough spots in which you’d like to turn back the hands of time. And we’ll give you the tactics for erasing mistakes and putting those metaphorical stem cells in action— to act as financial healers that will put you in a more secure position. But before we dive into specific scenarios, it’s smart to take a look at some of the bigger strategies that will help you climb out of any money-made hole you find yourself in.
➭ Be goal oriented.
Those who save a lot of money set big goals—goals that others might think of as unattainable. But those big goals? They’re what gets you on the right track, especially—as you’ll remember from the last chapter—if you write them down. Make sure your goals are specific and measurable and that you have a deadline.
➭ Plan to work longer.
Maybe you thought you were going to retire at 62 with a banjo on one knee and a grandkid on the other. Well, enjoy the babies and whatnot, but just think about extending your work life a bit, even if it’s part-time. By keeping income, well, incoming, you do several key things simultaneously that can help you recover from any setback. You give yourself more years to contribute to retirement. You give yourself more time before pulling money out of your retirement plans (which gives that money more time to compound). This will also reduce the number of years the money in those retirement plans has to last. And you delay tapping into Social Security (hopefully until you’re at least close to age 70), which is a big advantage.
Even if you’re determined to stop working at your current job, tapping into the gig economy or consulting part-time can help you accomplish all these things. Or look at alternative ways to add cash flow, like investing in rental properties.
➭ Don’t tinker with your investments.
Develop an investment plan and focus on funding it—not changing it—unless you discover a fundamental problem with the mix of stocks and bonds in your portfolio. It can be very tempting to try to recover from a setback by increasing the risk in your portfolio to earn more. Bad move. This can set you back even further. Stay the course.
➭ Consider the big cut.
Remember those SuperSavers? They work their magic not by cutting out a green tea here and there, but by focusing on the large expenses. Housing is generally the biggest expense in any American’s budget (well, it’s the biggest after taxes), so it is an obvious place to make a big impact. Choose a home that you can pay off
quickly and that is smaller than you can afford, and sock away the rest. And dump the gas guzzler for something smaller and more efficient, keep your car after it’s paid off, or go from a two-car to a one-car home.
Thanks again to Chatzky and Roizen for sharing these financial pointers. Next, the book takes you through specific tactics for individual setbacks. Helping you address each problem, such a too much debt, one step at a time. I hope that these financial catch-up strategies help get you motivated to improve your finances. You climb a mountain by putting one foot in front of the other. This book helps you climb your financial mountains and reach your goals.
Were any of these financial catch-up strategies new to you? How many have you begun to employ?
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Your site is one of the best that i have seen today. I really appreciate the tips for making up for starting to save for retirement late. They were really useful.
saving is very important especially for retirement. most people always believe saving has a time frame, but thanks for touching the old part pf saving which shows people that they can still start saving at 45. its never too late