Are You Behind on Your Retirement Savings? Consider These Strategies to Get Ahead

If you're behind in saving and investing for retirement, you're far from alone. A study from the National Institute on Retirement Security (NIRS) found that among workers aged 21 to 64, the median sum saved for retirement in a defined contribution plan (such as a 401(k)) was just $955 as of 2023.

Meanwhile, a Bankrate study found that 52% of workers expect Social Security to support them in retirement. That's particularly troubling, because the average monthly retirement benefit, as of April, was just $2,081 -- or about $25,000 annually. That won't support anyone very well these days.

Moreover, the Social Security program is facing a funding shortfall. If nothing is done, retirees will receive only around three-quarters of the benefits they're due. Still, all is not lost.

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What to do if you're behind on saving

So what can you do if you're among the many millions who haven't socked away enough for retirement? Well, all is not lost. As long as you're still working, there are multiple strategies to consider:

• Delay retiring if you can: Working a few more years will put more money into your investment accounts, and give that money more time to grow. It will also result in your nest egg having to support you for fewer years.
• Delay claiming Social Security: You can claim your benefits at any age between 62 and 70. The earlier you claim, the smaller the checks will be, but you'll receive more of them. For every year you delay, they'll grow bigger. (There's no additional benefit for delaying beyond age 70.) Indeed, multiple studies have found that most (but not all) people will get the most out of Social Security by delaying claiming their benefits until age 70.
• Reallocate your assets: If you don't have much of your savings in the stock market, consider moving some of them into it, perhaps via a low-fee broad index fund such as the Vanguard Total Stock Market ETF (NYSEMKT: VTI) or the Vanguard Total World Stock ETF (NYSEMKT: VT). Each will spread your dollars across thousands of stocks in the U.S. or the world. Stocks tend to grow faster than most alternatives over long periods. Even if you're a few years from retiring, much of your nest egg likely won't be touched for many years, so moving some of it into stocks may help it grow faster. (Of course, market crashes and corrections happen now and then, so only invest money you won't need for five, if not 10, years in stocks.)
• Invest more: No matter where you're investing your money, try to sock away more while you can. It will help your retirement account(s) grow more.
• Consider a side hustle: Few people will want to, but working a side job for a few years can generate some significant extra dollars to invest for your future. Just eight hours a week at $20 per hour amounts to around $8,320 over a year. You might find enjoyable side gigs, too, such as tutoring kids, or making and selling crafts.
• Consider relocating: This is another powerful move. You might stay in your region and simply move to a less costly home, pocketing (and investing) a profit from the sale of your current home. Or you might move to a less costly region. Either way, you might save a lot on home maintenance, utilities, taxes, and other expenses.
• Explore less common options: If it makes sense for you, you might take out a reverse mortgage, or cash out a life insurance policy.
• Consult a financial advisor: You may find one or more who offer a free initial consultation, but paying for a financial advisor's services can be worth it if you end up with peace of mind that they've helped you develop a solid retirement plan. Consider favoring fee-only advisors such as those you'll find via the National Association of Personal Financial Advisors (NAPFA) or the Garrett Planning Network.

Whatever you do, have a good plan -- and stick to it. Be sure you're planning for healthcare costs and how you'll handle them, as well as for inflation, which can wreak havoc on retirement.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.