How to Start Saving Money When You're Over 50 Years Old

The approach of retirement sometimes sneaks up on you. For a variety of reasons, some people may not begin saving seriously for retirement until they hit age 50. If you have neglected or ignored saving for your future, you can still employ strategies to help you get started and working towards establishing a retirement savings plan that will help carry you through your golden years.

Tradtional and Roth IRA Accounts

IRA accounts are one way to still make contributions to your retirement. As of the date of publication, the maximum amount you can contribute to your IRA each year out of your earned incone was $5,000 plus an additional $1,000 for those age 50 and over.

401(k) Retirement Accounts

Those age 50 and older who continue to work are also allowed to make the most of the 401(k) retirement account offered by their employer. The maximum contribution for a 401(k) account, as of the date of publication, was $17,000 with an additional $5,500 in catch-up contributions for those over 50, meaning a total contribution of $22,500 plus any additional employer matching amounts that your company deposits on your behalf.

Work Longer

Postponing retirement adds to your nest egg. If you can continue to work, you earn money to defray current expenses, instead of drawing it from retirement accounts, and sock still more away in savings. The general rule is that the longer you work, the more you'll have when you do cash your last paycheck.

Manage and Curb Expenses

Managing your expenses better frees up additional funds that can be used for retirement savings. See what cuts you can make to your household budget; if you save just $3 a day by skipping your daily caffe latte, for example, you'll pocket more than $1,000 a year. In addition, by curbing your household costs, you will be in a better position once you enter retirement to husband your resources and make your retirement savings go farther.

Emergency Accounts

Emergency savings accounts are designed to shield you from the unexpected. The account needs to have enough funds to cover at least six months of routine living and household expenses. Cash on hand is just as crucial to saving money because if an emergency situation arises you will not need to tap into investment accounts that may have early withdrawal fees, penalties or hefty tax liabilities.