Are you in your early 60s and concerned that you have no retirement savings? If yes, you're not alone. According to research from Aegon, the average pension pot for those aged 55-65 in the UK is just £106,000. That's a long way short of what financial experts advise people should save in general, and truth be told, is unlikely to provide a comfortable standard of living in retirement.
Having minimal retirement savings at 60 is clearly not ideal. However, it's also not the end of the world. There's still time to salvage your retirement if you put a retirement savings plan in place today. Here's a look at several things you can do to fix the problem.
All-out savings push
Make no mistake, if you're 60 now, and your pension savings are small, it's time to make an all-out push to boost them. This means cutting out expenses and saving as much as you can. Don't delay, start right now.
Draw up a budget and work out which expenses aren't essential. Be ruthless. Cutting out Sky or Virgin TV could save you £100 per month. Cutting back on meals out or takeaway food could potentially net you another £100 per month.
If you can save £500 a month from age 60 and earn a 6% annual return on your money, you could have around £60,000 saved by 68. That could certainly improve your retirement prospects.
Many Brits today are constrained by their incomes. Wages have gone nowhere for a decade, while expenses have risen significantly. In today's economic environment, it can be hard to negotiate the kind of pay rise you probably deserve.
As a result, it could be time to take matters into your own hands and explore ways to boost your current income. The more money you have coming in, the easier it is to save.
Last week, I looked at several different ways those approaching retirement could make some extra cash every month. Websites such as Freelancer, Upwork and TaskRabbit have made it easier than ever to pick up freelance work. Alternatively, websites such as Airbnb, Drivy and Fat Lama have made it possible to rent out your assets. With a little entrepreneurial spirit, there's no reason you couldn't pocket another £500 per month through these kinds of ideas.
Add this to the savings above, and you could be putting away £1,000 a month. Invested at 6% per year over eight years, this could grow to around £120,000.
Downsize your home
Lastly, if you're a homeowner, another option is to downsize your home. This could potentially free up a significant amount of capital as for many people, their home is their largest asset. According to pension specialist Royal London, moving from the average detached house to a semi-detached house could free up around £113,000.
If you downsized at 60, and invested this kind of sum for eight years at 6%, it could potentially grow to around £180,000. Combining this with the savings and income ideas above, and you could potentially retire with savings of around £300,000, which would certainly make a big difference to your retirement.
Hitting 60 with no retirement savings is a situation that you should definitely try to avoid. However, if this is your current situation, don't panic. Put a retirement savings plan in place today and you might just salvage your retirement after all.
Do you want to retire early and give up the rat race to enjoy the rest of your life? Of course you do, and to help you accomplish this goal, the Motley Fool has put together this free report titled "The Foolish Guide To Financial Independence", which is packed full of wealth-creating tips as well as ideas for your money.
The report is entirely free and available for download today, so if you're interested in exiting the rat race and achieving financial independence, click here to download the report. What have you got to lose?