By the time you reach the age of 60, retirement may be right around the corner. So in an ideal world, you'll have a nice amount of money saved for your senior years by then.
But what if you turn 60 and realize you have no money saved for retirement whatsoever? Fidelity says that you should have eight times your salary banked by then. If instead of that, you have $0, you may be inclined to panic.
Try not to. Your situation isn't the best, but it can still be salvaged. Here are some steps you can take to avoid a retirement that's filled with financial problems.
1. Plan for a longer career
If you're ready to get serious about retirement savings now but are aiming to stop working at age 65, that frankly doesn't give you a lot of time to build up a nest egg. So if you've reached age 60 with nothing saved, consider extending your career a bit more. Doing so gives you more time to build savings and create a financial cushion for your senior years.
In fact, if you're willing to work until you're 70, that gives you 10 years to fund an IRA or 401(k). It also gives you just enough time to invest your savings in stocks (though you'll want to scale back on those within a few years of ending your career).
So let's say that over the next decade, you contribute $500 a month to a retirement plan that delivers an average annual 7% return. That 7% is a bit below the stock market's average because we'll assume you'll scale back on stocks during that period.
If so, you're looking at a nest egg worth about $83,000. It's not a ton of money, but it's a safety net you can fall back on in addition to Social Security.
2. Aim to continue working during retirement
There's no rule stating that you can't hold down a job once you've made your retirement official. In fact, you're allowed to collect monthly benefits from Social Security even if you have a job (there are earnings limits that could result in withheld benefits, but those won't apply to you if you're working and collecting Social Security at age 67 or older).
Now at first, you might associate a part-time job in retirement with working a cash register or something similar you may not find so desirable. But thanks to the gig economy, work in retirement can actually be fun.
You could teach piano if it's a skill you have, or sell baked goods at farmers markets. You can also drive for a ride-hailing service if you don't mind spending time behind the wheel.
3. Turn your home into your nest egg
If you own a home, then there's a good chance you'll have it paid off in time for retirement -- or at least mostly paid off. If you're willing to sell that home and downsize, your sale proceeds could turn into your retirement nest egg or pad an existing one.
The median home sale price 30 years ago was $132,000, according to Federal Reserve data. Now, it's about $421,000.
So let's say you're able to sell a mortgage-free home for that sum and buy a replacement home for $250,000. Even if you take out 5% for a real estate agent's commission, you could still walk away with about $150,000 in your pocket. That's money you can then dip into as needed on top of the funds you've saved separately.
While it's not a wonderful thing to be 60 with no retirement savings, you have options. Commit to turning things around immediately, and you may be surprised -- in a good way -- at how financially sound your retirement ends up being.
FAQs
Fidelity says you should have eight times your salary saved for retirement by age 60. If you have nothing saved so far, start building your nest egg immediately. Consider changes to your plans, like working longer, holding down a part-time job as a retiree, or using your home as a cash source.
What to do if you are 60 and have no retirement? ›
Experts say you should have 10 times your income saved to retire by age 67—here's what to do if you aren't yet there
- Estimate your retirement savings and income needs. ...
- Stay relevant in the employment market. ...
- Write out your retirement strategy. ...
- Catch up on your savings using tax incentives. ...
- Seek professional financial advice.
If you're 60 years old and have no money for retirement, consider the following options:
- *Delay retirement*: Continue working, even part-time, to supplement your income and build a retirement fund.
- *Social Security*: Apply for Social Security benefits, which can provide a steady income stream.
If you retire with no money, you'll have to consider ways to create income to pay for your living expenses. That might include applying for Social Security retirement benefits, getting a reverse mortgage if you own a home, or starting a side hustle or part-time job to generate a steady paycheck.
What happens if you have no retirement savings? ›
Many retirees with little to no savings rely solely on Social Security as their main source of income. You can claim Social Security benefits as early as age 62, but your benefit amount will depend on when you start filing for the benefit. You get less than your full benefit if you file before your full retirement age.
How many 60 year olds have nothing saved for retirement? ›
About 27% of people who are 59 or older have no retirement savings, according to a new survey from financial services firm Credit Karma. To be sure, that's the same share as the overall population, yet boomers have less time to save for retirement given that the generation is now between the ages of 59 to 77 years old.
Is it too late to save for retirement at 60? ›
It's never too late to start saving for retirement. Even if you'd like to retire in 5 or 10 years and have little to nothing saved—it's still not too late. Start small, and don't just save—invest. Put something away, and do it consistently.
How to start over at 60 with nothing? ›
Start setting goals for the things you want to achieve in your new life. Think hard and reflect upon your life up till now, assess the things you never had the chance to do, and try to do them now. By setting achievable goals, you will not overwhelm yourself, and yet you will have something new to do from time to time.
Is it worth starting a 401k at 60 years old? ›
At 60, you still have some time to save and invest aggressively for retirement. Along with your future Social Security retirement benefits, you still have seven years (or longer) to maximize your 401(k) and other tax-advantaged retirement savings accounts like a traditional IRA or Roth IRA.
What do most 60 year olds do? ›
Some may plan to retire, and others start up small businesses. Some settle in to help take care of their grandchildren, whereas others update their passports and take off on adventures around the world. And some decide to do it all! This new phase of life provides endless opportunities to live your life to the fullest.
For example, anyone over 60 will receive free prescriptions from the NHS. You will also be eligible for a free NHS eyesight test, so you should definitely inform your optician if you still haven't had an appointment. If you're aged 65 or over, you can also get the free NHS flu vaccine.
What happens if I can't afford to retire? ›
Unless you have a secret plan to get free money or you're lucky enough to hit the lottery, not saving enough for retirement will leave you scrambling to get by in old age. At the very least, you'll need to work longer or make serious adjustments to your lifestyle to get by.
Where is the best place to retire with no savings? ›
The top 5 U.S. cities to retire if you don't have any savings—only 1 is in Florida
- Foley, Alabama. Percentage of population 65 and older: 31% ...
- Mountain Home, Arkansas. Percentage of population 65 and older: 28% ...
- Hot Springs Village, Arkansas. ...
- The Villages, Florida. ...
- Bella Vista, Arkansas.
So if you've reached age 60 with nothing saved, consider extending your career a bit more. Doing so gives you more time to build savings and create a financial cushion for your senior years. In fact, if you're willing to work until you're 70, that gives you 10 years to fund an IRA or 401(k).
Can a person who has never worked collect Social Security? ›
Although many of the programs base benefit amounts and eligibility to work history, there are some instances where a person who has never worked can collect benefits. One program that provides benefits to people, not based on their work history, is Supplemental Security Income (SSI).
What does life without retirement savings look like? ›
Without savings, it will be difficult to maintain the same lifestyle an individual had in working years. Some retirees make adjustments by: Moving into a smaller home or apartment. Reducing television or streaming services.
How much does a 60 year old need to retire? ›
If earning a current salary of $100,000 a year, you should aim for at least $800,000 to $1 million in retirement savings by 60. This figure isn't set in stone—it's a guideline. Your actual needs could be higher or lower depending on where you plan to live, healthcare costs, and your desired standard of living.
What happens when you get old and have no money? ›
Elderly individuals who are unable to turn to family for financial support and have no money can become a ward of the state. This may be the case if the senior develops a health emergency and is no longer able to live alone.
