3 signs you’re not saving enough for retirement, according to experts

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• Even if you’ve been socking away cash for years, you might not have enough money set aside to retire.
• If you expect to take Social Security payments as soon as you’re able, that’s one sign you don’t have enough saved.
• If there’s a lot of cash sitting in your checking account, it could be because your automatic 401(k) and IRA contributions aren’t enough.
• Another sign you don’t have enough set aside: You’re thinking about downsizing your life more than you should have to in order to make ends meet. 
• The good news is there’s still time to save — if you’re over age 50, catch-up contributions could help you add to the limit you’re able to add to your savings each month. 
• Use Blooom to analyze your 401(k) today and see how you can grow your retirement savings »

Saving enough for retirement can be a tricky process — it can be hard to know exactly how much you’ll need later in life, and how much to save to get there while you’re working. 

Oftentimes, it’s better to err on the side of caution. But it’s easy to let saving fall by the wayside as the costs of life add up. For many people, saving is best done as a long process, with money invested growing over time. But that doesn’t mean you can’t make up for lost time by saving more. 

If you think you might be short on savings, saving more with catch-up contributions and other investing accounts can’t hurt. But there are some sure signs you’ll see if you haven’t saved enough for retirement as you get closer.

1. You plan take Social Security as soon as possible to make ends meet

If you’re planning to take Social Security as soon as you’re eligible, you might not have enough saved. And, the sooner you take Social Security distributions, the less you’ll actually get. 

Social Security payments are based on when you start taking them. The younger you are, the smaller the payments you’ll receive. While benefits can be taken at age 62, claiming benefits at the earliest possible age could reduce your payout by between 25% and 30%. Waiting until age 66 or 67 could help you get the full benefit and more money each month, though the exact age varies by the year you were born. 

Ideally, you’d have enough money set aside in savings and retirement accounts to cover your living expenses, medical costs, and more between the time you stop working and start taking Social Security payments.

2. You have lots of cash sitting in your checking account at the end of the month

If you have lots of money leftover after paying bills, saving for other goals, and having automatic transfers made to 401(k)s and IRAs, you may not be saving enough. 

Most experts suggest saving about 15% of income for retirement, including any employer match in a 401(k). And while retirement accounts and automatic transfers are easy to set up, they can also be easy to forget about. Increasing your contributions each year is a good habit to get into, and some accounts offer automatic increases each year. But, if you still notice lots of extra cash leftover, saving and investing that money now can help make ends meet later.

3. You’re thinking about downsizing your life to make ends meet

At retirement age, it’s natural to think about downsizing things like your home after children have moved out. But if you’re worrying about needing to cut the things you used to enjoy in order to make ends meet— like traveling, giving gifts, or having meals out with friends — it’s a sign that you may not have as much saved as you think.

There are a few ways to cut costs for retirement that are worth considering, including downsizing your home for something more affordable, and trading in a car for something you can buy in cash. Adjusting these major costs could help you free up your budget and keep living the life you’re used to. 

Financial planner Malcolm Ethridge advises anyone over age 50 to take advantage of catch-up contributions. In 2020, that means savers over 50 can add $6,500 to their annual 401(k) contribution limit according to the IRS, for a total of $26,000 per year. IRAs also allow a catch-up contribution of $1,000, for a total of $7,000 per year. Taking advantage of these higher limits could help anyone over 50 save more for their future, wherever they are in their saving process.