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Ask an Advisor: I’m 60 and ‘Feeling Hopeless’ With Just $15k Saved. What Can I Do Now to Increase My Retirement Savings?


I am feeling hopeless. I am 60 years old and have only $15,000 saved. I will get a 80% pension from the state of Massachusetts and be able to retire in three years. What can I possibly do to increase my savings now?

– Joy

There’s no question that $15,000 is a small amount of retirement savings for a 60-year-old, and I can understand why you would be concerned about wanting to catch up. However, I would encourage you to reframe the problem you are facing. Rather than focusing on the fact that you have a low savings balance, think about your overall retirement readiness since that’s what it’s ultimately all about. You may find that you are in a better position than you realize, or that there are better ways to close the gap than saving more.

Do you want help assessing your retirement readiness and income? Speak with a financial advisor about it today.

How Much Income Do You Need in Retirement?

Start by making sure you have a good understanding of the amount of income you’ll need in retirement, and compare that to what you currently earn. You’ll likely find that you need, at most, the same amount of income you have now, but possibly even less.

One thing that sticks out to me about your situation is that Massachusetts has a 5% income tax. However, state pension benefits are excluded, so right out of the gate you’ll save 5% of your income that you’d normally be paying.

A pension that replaces 80% of your current income is substantial and absolutely makes up for a considerable chunk of “missing” retirement savings. So, say you need 90% of your current income. If your pension replaces 80% then you are most of the way there. (If you need more help with your retirement income plan, consider matching with a financial advisor today.)

How to Close the Retirement Gap

A 60-year-old woman looks over her finances to determine whether she can retire in three years.

Saving more is certainly a good idea, but I’m not sure how much you can realistically make up at this point. I don’t know what your income is or what your expenses are. But, I know that there is only so much the average person can cut from their budget. Without knowing your situation, my suspicion is there are better ways to close your retirement gap. (But if you want more help closing your retirement savings gap, this tool can help you find a financial advisor.)

So, what are they? Some the ideas that come to mind include:

Create More Room in Your Budget

Look for realistic ways to permanently reduce your expenses that you’ll be able to live with. If possible, downsizing your home or moving to an area with a lower cost of living can potentially put a significant amount of money back into your budget. Not only will this free up room to save more, but it will also directly cut down on the amount of income you need in retirement.

Work Longer

You say you are eligible to retire in three years, but do you have to? Every year you work is one more year of income and one less year of drawing from your savings. Plus, if you leave at 63 you won’t be eligible for Medicare for two years, which may significantly increase your healthcare costs.

Maximize Your Pension

I’m not deeply familiar with the Massachusetts state pension system, but a quick glance suggests that your pension is based on either your highest consecutive three or five years of income. Will working longer increase that pay base for you? If so, you may want to consider the impact that working longer could have on your eventual pension income.

Note that since your pension is from Massachusetts, I made the assumption that you didn’t contribute to Social Security. If you are, in fact, eligible for Social Security, then don’t forget to include that as well.

Retire and Find a New Job

A 60-year-old woman preparing for retirement reviews her finances, including her monthly expenses.

You can also consider retiring from your current employer, and if you’re able to continue working even part-time, try finding a different job. That may seem like a bad idea, but it can be a smart financial move even if you earn substantially less at your new job.

Here’s why: If you’re going to receive 80% of your income in the form of a pension, you’ll come out ahead if you find a different job and make more than 20% of what you are currently earning.

For simplicity’s sake, let’s say you’re making $100,000 per year currently. You retire and annually collect 80% of your salary – or $80,000 – from your pension. If you take a part-time job making $30,000, then your total income actually increases to $110,000. (A financial advisor can help you game out scenarios like this one. Consider speaking with an advisor today.)

Bottom Line

No doubt that it would be great if you had more money socked away in retirement savings. You also should take reasonable steps to increase it, but there’s no magic formula for leaping forward. However, an 80% pension provides a solid base of income for you to plan with.

Know that, it may be better to focus on other areas of your retirement plan. Limiting expenses, maximizing your pension and looking for even a small amount of supplemental income may offer better results than focusing on savings.

Retirement Planning Tips

  • A financial advisor can help you make strategic decisions leading up to retirement. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Social Security plays an important role in most Americans’ retirement income plans. Determining the optimal time to claim your benefits is critical. SmartAsset’s Social Security calculator can help you estimate how much your benefits will be based on when you plan to file for them.

Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you’d like answered? Email and your question may be answered in a future column.

Please note that Brandon is not a participant in the SmartAdvisor Match platform, and he has been compensated for this article. Some reader-submitted questions are edited for clarity or brevity.

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