Dear Liz: What advice would you give to a Silicon Valley professional who hasn’t done a good job planning for retirement? I’m 53 and maxing out my 401(k), saving $24,000 a year with my employer matching my contributions dollar for dollar up to 6% of salary. In addition, I’m saving $50,000 to $60,000 of my $240,000 annual salary. I’m debt free.
I wish I had started saving like this early in my career. Looks like I’ll probably have to work until I’m at least 65 or 70. Any advice on retirement planning would be greatly appreciated.
Answer: Your current savings rate is impressive, but you probably should plan to work at least until your full retirement age for Social Security, which is age 67.
Retiring earlier would require you to cut back even more on your spending or increase the odds your funds won’t last you through a long retirement.
Early retirement may be involuntary, of course.
Many people retire sooner than they expect thanks to a layoff, a health crisis or the need to take care of a family member. That is yet another reason why people should get started saving for retirement as early as possible — they may not have as many years to save as they think, and making up for lost time gets increasingly difficult the longer they wait.
Most people aren’t in the fortunate position to be able to save 30% or more of their incomes in their 50s, which means catching up is close to impossible.
You may still have options if your career and your savings sprint are cut short.
If you own a home, you can tap the equity either by downsizing (selling and moving to a smaller place) or using a reverse mortgage. You can reduce your expenses, possibly by moving to an area with a lower cost of living. You can supplement your retirement income by working part-time.
You also should consider maximizing your Social Security check by delaying benefits until age 70, even if you wind up retiring earlier. Social Security benefits grow by 8% a year between full retirement age and age 70, which is a guaranteed rate of return you can’t find anywhere else.
Delaying Social Security is a way to insure against longevity — if you live longer than you think and run out of other money, that larger check can help protect you from poverty at the end of your life.
Today’s top story: Three student loan risks parent borrowers should avoid. Also in the news: Why you don’t have to be rich to feel good about your money, how second chance checking reopens doors to banking, and the lazy person’s guide to travel hacking.
Today’s top story: Which states have estate and inheritance taxes. Also in the news: Why making money with online games is a bad bet, cities with the most and fewest young homeowners, and a decade after the Great Recession, 1 in 3 Americans still haven’t recovered. 
Today’s top story: Suing banks will get easier – if CFPB rule survives. Also in the news: 2017 Driving in America report, 7 tips for preparing your taxes in a divorce, and why you need to stop beating yourself up over past money mistakes. 
Today’s top story: How folks took charge of their credit card fears. Also in the news: Getting tax relief from good deeds, five sales to shop on Amazon Prime Day besides Prime Day, and how to tell where your state tax dollars are actually going.