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Most Americans aren’t saving enough for retirement — and worse, many are off to a late start. Since 2011, the annual percentage of U.S. workers with less than $1,000 in savings and investments for retirement has ranged from 26% to 36%.

These low savings levels are taking a toll on nest eggs. One estimate puts the ideal retirement savings for an individual at age 45 at $162,000 and calculates that, in reality, most Americans are about $100,000 short of that goal by the time they reach age 45. Let’s review what late-starters should do to give their savings a necessary boost and learn some tips for those who are 15, 10, or five years away from retirement.

15 Years Away From Retirement

Assuming that your target retirement age is 65, you’re now 50 years old and are likely to be part of the Generation X. About half of members of Generation X have less than $10,000 in retirement savings.

Step 1: Take Advantage of Catch-Up Contributions

Starting at age 50, you’re now legally allowed to start making annual catch-up contributions on top of the regular contribution limits to your qualifying retirement accounts. In 2016, individuals age 50 and over could contribute an extra:

  • $6,000 on top of the $18,000 limit to 401K (other than a SIMPLE 401K), 403b, SARSEP, and governmental 457b plans;
  • $3,000 in catch-up contributions to SIMPLE IRA or SIMPLE 401K plans; and
  • $1,000 on top of the $5,500 limit to traditional or Roth IRAs.

Additionally, individuals with at least 15 years of employment can make additional contributions to their 403b plans on top of the regular $6,000 in catch-up contributions. For more details, review the IRS rules for 403b contribution limits.

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