Retirement Planning For Late Starters

We’re always hearing dire warnings about how woefully unprepared boomers are for retirement. An Ipsos-Reid survey done for CGA-Canada reports that 25% of their respondents have never made a savings contribution and 29% said they had no money left over to save after paying expenses.

So, what if you’re now in your 50’s, still have a mortgage, and have a measly retirement fund? You held off with your savings for whatever reason and chances are you’re now thinking more about retirement and how you want to spend your time.

RelatedA simple way to boost your retirement savings

What do you do now?

If you’ve arrived late to the retirement savings game then you have your work cut out for you. This is a critical time for retirement planning.

For many Canadians, their 50’s are the peak earning years and they could still have 10 – 15 years left in the workplace.

Typically there is a decline in spending as many larger financial commitments are hopefully behind you, or are winding down. There should be a big push to optimize this and work to accumulate your nest egg. You’ll have to set aside more of your earnings and consider some cost-cutting options.

For most people, learning to spend less is about breaking bad habits. This may be the last shot you have to impose some meaningful discipline on your finances. Stop throwing away money on stuff you don’t really want or need.

Retirement Planning for Late Starters

Pay down high interest credit card debt as soon as possible. Pay off your mortgage. Take the money spent on mortgage payments and providing for your children and whisk it away into your savings. You probably have loads of unused RRSP contribution room, which can generate huge tax returns.

Make the most of new money. Consider putting any bonuses, tax refunds or other lump sum payments directly into savings.

You may have to reduce your style of living. Consider downsizing to a less expensive-to-operate home. Tell grown children still living at home to start fending for themselves.

Basically – spend less.

If you and your spouse can do that for 10 – 15 years while earning average salaries or better, it should provide enough for a typical middle-class retirement.

Where do I start?

Figure out where you stand financially.

Assume you don’t sell your house and you receive $25,000 to $30,000 a year per couple from CPP/OAS and you have no employer pension.

Ask yourself what you want to do and where, because only then can you know how much you will need.

Related: What’s all this retirement planning for, anyway?

Based on your anticipated expenditures, what would be your annual shortfall?

Do some serious number crunching and figure out what it would take to live comfortably in retirement. Play around with online calculators, but use caution with these – they generally ignore tax situations and are based on the assumptions you enter.

Keep working

You’ll probably have to keep working, at least part-time after you reach 65 instead of kicking back and taking it easy.

Consider your options and keep your skills fresh. You may be able to work part-time for your current employer. Perhaps you are in a field that would allow you to do consulting work one or two days a week. Start a side business.

You might want to start strengthening your network, or consider some continuing education.

Investing in your 50’s

Believe or not, there’s still time to provide for a decent retirement for yourself.

Related: Some thoughts on turning 50

Investors tend to be more risk averse at this age, but growth stocks should still be part of your portfolio today. Well-established companies suit a conservative buy-and-hold approach, whether with individual stocks or ETFs. Dividend stocks continue to attract investors seeking income. Bonds (consider higher interest corporate bonds) will act as a cushion.  Some people are attracted to rental income.

This is not the time to speculate. Learn what it means to build a portfolio – then build one appropriate for your needs. Create a mix of investments. Rather that looking for the “best” investment, you should think of strategies that help you maximize your lifetime income.

Invest in what makes sense to you to enable you to grow your money and earn a reasonable return. Make sure you’re comfortable with the risk and rewards of each investment type.

Final words

These days, individuals are responsible for saving enough money for their own retirements. Most people will tell you they wish they had started earlier.

Related: When is the best time to invest?

The biggest problem with starting a retirement plan later in life is the loss of a significant period of time over which earlier investments could have compounded and grown.

Despite their best intentions, many people don’t get serious about retirement planning until they reach their 50’s.

The only way to create wealth is to save. The key is to begin – and begin now.

Print Friendly, PDF & Email


  1. Dan Kent on May 19, 2018 at 6:07 am

    The key is to drive the fact home that you NEED to be starting out in your twenties, at the very least your early 30s.

    I couldn’t imagine sitting at 50 years old with nothing saved up, but a ton of Canadians are. There isn’t enough education on money. Good thing personal finance and investing websites are sprouting up like mad now! Just have to weed through the bad ones to find the good.

    Great post!

  2. Susan on July 28, 2018 at 8:00 pm

    Given that a person is in the situation you describe and has a child going to university. Would you recommend the parent cash flow the school costs or use that money for retirement savings and let the kid take out student loans? We are paying down debt from the stupid years and have a no new debt approach. We paid cash for cars etc. And have preached a no debt life to the kids. So telling him to use student loans goes against my principles but I’m also running out of time to save for retirement.

  3. Michelle Powers on September 19, 2020 at 11:24 pm

    Here is another factor to look at. What if you and or your spouse become injured (no fault of their own) and become disabled. In fighting lawsuits, you are cut off from your income source for one year, a parent passes and they have nothing saved, so their funeral expenses are on you and you are uncertain what your future holds for one partner, who may or may not be able to go back to work. This happened to my husband and I and now on the cusp of 50 yrs old, we are starting fresh as we had to use our savings to maintain our home. We have vehicles, all paid for, but still have a mortgage! What can we do when we are living on a disability wage?

Leave a Comment

Join More Than 10,000 Subscribers!

Sign up now and get our free e-Book- Financial Management by the Decade - plus new financial tips and money stories delivered to your inbox every week.