No retirement savings at age 55? Here’s what you can do

Seven steps that can help you build a more secure retirement.

By Brock Anderson

If you’re not confident about your financial situation at retirement age, you’re not alone. According to the latest research from the Employee Benefit Research Institute, retirement confidence is at an all-time low. Only 13 percent of workers reported a high confidence about their financial future. And if you’re 55 with little to no savings, which can be a common dilemma for many pastors, things may seem even bleaker. But it’s not all doom and gloom. In fact, there is good reason for hope.

Here are seven steps you can take to make your way toward a comfortable retirement.

Start now. It doesn’t matter if you’re 55, 35 or 25 years old, the best time to start planning and saving is now. That’s not breaking news, but it doesn’t deter from the importance of putting it into action. The earlier you begin saving, the more time your money has to work for you.

Evaluate your income and expenses. Don’t make educated guesses about your current financial situation. Make a specific list of everything you own and everything you owe. You can create your own spreadsheet, or for guided assistance, you can download a budget template from Microsoft Excel or find a generic template online. However you do it, make sure the list is comprehensive so that you’ll know exactly where you stand financially.

Calculate your future income needs. Once you have an idea of your financial situation now, you need to know how much income is required to meet your future expenses and allow you to retire comfortably.

To help determine this figure, you can access an array of retirement planning calculators at Also, as a result of the Pension Protection Act of 2006, many retirement plan providers provide specific online advice calculators. Contact your provider for more information

Make retirement saving the priority. If you’re not invested in your employer’s 403(b) or 401(k) retirement plan, consider starting immediately. Statistically, it is still one of the best ways to prepare a comfortable financial future. Even if you don’t retire vocationally, a well prepared retirement can give you the financial assistance you need to pursue more ministry opportunities, provide financial security for loved ones and exemplify financial stewardship by making provisions for future needs.

If you’re age 50 or better, you have advantages: There is a special provision known as the age-50 catch up that allows you to contribute beyond the current retirement plan limit ($16,500). For 2010, you can contribute $5,500 over that limit. You can also contribute up to $6,000 to a Traditional or Roth IRA, if eligible.

Invest appropriately. If you’re 55 or older (and especially if you’re just starting to build your retirement savings), a good principle to follow is to be less aggressive and more conservative.

You want to store as much as your savings as possible, and while investing in stocks can get you large returns quickly, it can just as quickly deliver losses, with little time to recover from the losses. If you’re younger, this is not as much of an issue because you can actually take advantage of the stock market’s volatility over time.

Define your budget. Set up a specific spending plan and stick to it. Identify your necessities and your budget busters (such as eating out or excessive trips to the mall).  And do all you can to avoid putting anything else on credit cards. For assistance, you may want to attend a financial seminar at your church or use a service like Quicken to help you develop, manage and maintain this budget.

Consider working longer. The fact of the matter is that you may still need to work after retirement. In fact, 72 percent of workers expect to work for pay after reaching retirement age, so it’s not an uncommon solution.

When you put these principles into practice, you can build significant savings. There’s no doubt that it takes hard work, but it can be done. And the importance of taking action immediately cannot be stressed enough. Start today. You’ll be glad you did.

Brock Anderson is a writer for GuideStone Financial Resources, Dallas, TX, the country’s largest benefits board serving the evangelical community.

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