1 in 5 Americans Over 50 Don't Have Retirement Savings. Here's How to Kickstart Yours

If you lie awake at night worrying about how you'll pay for your old age, you are not alone. A recent AARP survey showed more than 60% of Americans over the age of 50 think they won't have enough cash for their retirement. Moreover, 1 in 5 don't have any retirement savings in their brokerage accounts at all.

The good news is that it is never too late to start building your nest egg. Sure, there's a lot of talk about the power of starting early. But that isn't always possible. Sometimes it is hard to keep on top of the financial demands of today, never mind tomorrow.

More than that, there's no point in thinking about what might have been. If you are in your 50s and your retirement fund is not where you want it to be, take these three steps today.

1. Review your finances

For some people, the idea of checking in with their spending can generate feelings of panic, fear, frustration, and defensiveness. Try to reframe those emotions. Taking an hour or two to map out where your money goes is the first step toward a more stable retirement.

Sit down with your most recent bank statements and look at your spending vs. your income. The idea is to break your spending into categories. You might use an online banking tool or budgeting app. I prefer spreadsheets -- there are a bunch of downloadable ones online.

However you do it, start with your fixed essentials such as housing, certain utilities, and insurance. Then look at your variable costs such as groceries, bills, transport, debt repayments, and entertainment.

No matter how tempting it is, don't skip this review or guesstimate your costs. The groundwork you do now will help you kick-start your retirement savings.

1. It gives you an idea of how much you'll need when you retire. Use your current costs to figure out what you might spend later in life. Then you can look at how much you might get from Social Security, and start to estimate how much you still need.
2. It puts you in the driving seat. If you don't yet have money put aside for your old age, you need to find some extra cash if you're going to change that picture. The only way to do that is to identify potential savings and start to change your habits.

2. Make a plan and adjust your spending

If you're 50 and plan to retire at 67, you still have 17 years to save. That's a decent amount of time, so don't jump to drastic measures. What's important is to find a realistic amount that you can consistently put aside each month.

Look for non-essential spending that you might reduce. That might be subscriptions, takeout meals, or travel. Perhaps you can cut your grocery bill by 10% and halve your entertainment costs. The ideal is to find a combination of cuts that isn't going to make your life miserable. Commit to putting any unexpected windfalls directly into your retirement fund.

It might be that you can't see any areas where you can save more. In which case, might you be able to take on a side hustle to bring in some extra income? The bigger the gap between your income and your spending, the more money you'll have left to invest.

3. Put your extra retirement money to work for you

Once you've found some money to invest each month, you're well on your way to changing your situation. Now you can look for ways to make that money work for you.

One popular option is to invest that money in the stock market. You don't need to be an expert in stocks and shares to do this. Consider buying an index fund or ETF that tracks the S&P 500. This gives you exposure to the largest 500 companies in the U.S. Plus, it has a historically proven track record of solid returns.

Use tax-advantaged accounts to boost your fund even further. Here are some accounts to consider:

• Individual retirement account (IRA): There are different types of IRAs. A traditional IRA can reduce your tax bill today, while a Roth IRA lets you contribute post-tax dollars and make tax-free withdrawals further down the line. For 2024, the maximum amount anyone over 50 can contribute is $8,000. That's the standard $7,000 plus an additional $1,000 in catch up contributions.
• 401(k): These are employer-sponsored retirement plans. Not only are there tax advantages, some employers will match some of your contributions. Ask your HR department if your workplace has one and how you can get started.
• Health savings account (HSA): If you have a high-deductible health plan, you can use HSAs to save toward your health costs. HSAs have a triple tax benefit. You lower your tax bill when you contribute, your money grows tax free, and -- if you use it for health expenses -- you can withdraw it tax free as well.

Make a start today

Rather than lose sleep over retirement money, find a way to start saving today. Let's say you invested $300 a month and were able to earn a return of 8%. The power of compound interest means you could have over $120,000 in 17 years. If you're able to invest more, you could build a solid chunk of money to see you through retirement -- particularly if you make the most of tax breaks along the way.