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You're Retirement Age With Nothing Saved For Retirement. Now What?

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Imagine that you’re 55 or 60 years old with nothing saved for your golden years. Oh wait, that’s roughly four out of 10 Baby Boomers now.

New research from the Insured Retirement Institute found that only 60% of Boomers have socked away any money for retirement, down from 80% in past years. And only one out of five Boomers has $250,000 or more saved.

The best part is that four out of 10 of those Boomers with less than $250,000 in savings think they’ll be able to handle all of their basic expenses in retirement—with room for travel and other hobbies. Here’s news: That’s not likely.

So what’s an almost-retiree to do? When you find yourself staring down the barrel of retirement and counting on nothing but Social Security, is there anything that can salvage the situation?

Here, a variety of financial experts weigh in:

Consider downsizing. “For those in their mid to late fifties with no financial savings, yesterday was the time to start downsizing and fully investing in a 401(k) and IRA, but today is the next best thing,” says Avani Ramnani, a financial planner in New York City. Could you get rid of the big family house and move into a smaller townhome or condo? The smaller your expenses are in retirement, the less money you’ll need.

Keep working. For a long time. If you can, plan to work until at least age 70, when you can collect the maximum amount of Social Security benefits. If you retire at 70, you’ll get 32% more than you would have at age 66, and 76% more than you’d collect at 62. So if your monthly Social Security check would be $1,000 at age 66, you’d collect $750 at age 62 and $1,320 at age 70, according to Peter Palion, a financial planner in East Meadow, NY. It’s worth the wait if you can make it.

In fact, just keep working indefinitely. For some people, reading a book on the beach is boring. If that’s you, why not just keep your day job? Even part-time income would supplement Social Security and keep you from spending any savings down. “I am finding that many people don’t mind working and not retiring if they get to do what they love to do,” says Victor Garza, a financial planner in Richardson, TX. “It’s a new retire-mentality.”

Delay Social Security. It may seem practical to start collecting money as soon as you can. But “the one thing people should definitely NOT do is claim Social Security benefits at 62,” says David Mendels, a New York City financial planner. Not only will your benefits be reduced for life (see above), but they’ll also be limited if you’re still earning income. Until you reach full retirement age, you’ll lose $1 in benefits for every $2 you earn over a certain amount ($15,720 in 2015).

Save your butt off. If you haven’t been saving until now, it might be because you truly don’t have the funds. But if you’ve just been suffering from a lack of momentum or know-how or sheer laziness, knock it off and start maxing out retirement accounts, stat. “For 2015, the maximum 401(k) contribution is $18,000,” says Niv Persaud, a financial planner in Atlanta. “If you’re 50 years or older, you have an additional $6,000 to contribute.”

Maximize HSA contributions. Now that an increasing number of people have high-deductible health plans, it’s possible that you do, too. That means you can sock away $3,350 for an individual and $6,650 for family coverage, with an extra $1,000 if you’re 55 or older. Future health costs are no joke, and being able to pay for them with pre-tax money is a win.

Trim your budget. “You need to eliminate all debt and extra spending to free up as much as you can to redirect toward saving money for retirement,” says Mark LaSpisa, a financial planner in South Barrington, IL. This has the added benefit of leaving you with a lightened lifestyle in retirement as well.

Get creative. What if you took in a roommate who rented the extra space you have over the garage? What if you took a shift at your local bookstore on weekends, or picked up extra freelance work in your field? What if you moved in retirement to a state with a lower cost of living and better tax advantages for seniors? Ideally you need to make more now, work longer or spend less later. Says Hurst, TX financial planner Patrick Wallace: “Our experience has been that the actual solution is a blend of all three.”

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