WORLDVIEW: What to do when it’s too late to save for retirement

Many South Africans have no retirement savings. Even among those living relatively comfortable lives, many have neglected to squirrel away enough to keep them in their twilight years..Indeed, the problem isn't unique to South Africa – around the world, there are billions in the same boat. Exacerbating the situation, improvements in health care, declines in smoking rates, and most importantly, improvements in education mean that many people will be living longer lives than their parents and grandparents..So, here we all are – expected to lead longer lives but failing to make provision for our old age. It's a troubling situation..___STEADY_PAYWALL___.What can you do if you have failed to save for retirement, especially if you are a working person in your late 40s or 50s, with no time left to make up the difference? While your options are limited, you do have some options..Cut expenses.Your top priority must be getting yourself ready to survive with greatly reduced income. Now is the time to cut any and all unnecessary expenses. If you are paying off a couple of nice cars, downgrade to a single, basic and reliable car that you can pay off in a year or two. If you're eating lunch out every day, wake up earlier and make yourself a peanut butter sandwich. If you subscribe to several pricey entertainment options, cut off your subscriptions and look elsewhere for fun – I recommend board games and your local library for books and movies..If you are paying off a large family home, consider downsizing your house. You may have enough equity in your home to buy something small for cash. If your children have grown up, this is a great way to sharply reduce your monthly expenses..PREMIUM: How to make your money last in retirement – Schalk Louw.The point of all this brutal cutting is threefold. First, it will give you a good sense of how much you actually need to live. Many of us think we need a lot more than we really do. Cutting down to the essentials will give you a sense of your true needs – and they may be more modest than you imagine..Second, it will help you start slashing your debt. Debt is a killer for retired people, so getting to your old age debt-free should be a priority. Make it your goal to pay off any credit card, home loan, or car debt as soon as possible..Third, all this cutting should free up some cash for savings. If you have any retirement accounts, it makes sense to direct some additional savings into them. In addition, if your job offers any retirement savings benefits, sign up immediately and maximise your contributions. But you should also be sure to build up some easily accessible cash savings to deal with any emergencies. As long as you are working, stick to your reduced budget and save as much as you can..Continue working.Your job may expect you to head out the door promptly when you hit age 60 or 65, but this doesn't have to mean your working days are over. It may simply mean that you have to adjust your expectations..While a worker in their 60s or 70s may have a lot to offer – experience, skills, dedication – many employers prefer cheaper, younger workers. This can make it challenging for older workers to find jobs. This will be especially true if you hit retirement age in a mid-level office job – finding something that pays the same will be difficult..PREMIUM: How to protect your retirement savings from hackers on the rampage!.So, you may have to broaden your horizons. It may mean taking a part-time job that pays less or working as a contractor for your old employer for an hourly fee. It may also mean creating your own opportunities – offering babysitting or pet-sitting services, or driving for Uber. If you have any spare space in your home, renting out a room may be an option..The key thing is to try and have at least some income coming in. The less you need to rely on savings, the better..Focus on your health.For many older people, medical costs are their biggest and fastest-growing category of expense. Whatever your age, you can take steps to improve your health and minimise your need for costly interventions. Many of the conditions that plague the elderly can be improved or avoided by getting regular exercise, staying connected socially, eating a healthy diet, maintaining a healthy weight, quitting smoking, and minimising drinking. Obviously, some health issues are unavoidable – especially if you have decades of bad health habits under your belt..But even people who are already ill or frail can benefit from improved exercise and diet. It's never too late to invest in your health, and the payoff can be substantial..Facing retirement with inadequate savings can be a terrifying prospect. But there are aspects of your financial life that you can control – such as your spending – and any savings will help. It's never too late to develop a plan for your golden years. And even if your retirement is not a leisurely dream, you can find ways to make it work.

WORLDVIEW: What to do when it’s too late to save for retirement

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