The second half of your career can be a powerful time for retirement savers. In this episode, our team shares how to maximize contributions, use time strategically, catch up, and balance growth with risk as retirement approaches. If you’re in the home stretch of your career, you’ll walk away with practical steps to help you focus on what matters most now and move confidently into your next chapter.
Episode Transcript:
Intro/Closing: 0:02
Welcome to the Real Talk Retirement Show, where we explore the financial side of retirement and beyond. Whether you’re currently retired or planning for the future, we offer real, relatable conversations about money and personal finances. Most importantly, we dive into all these topics using Real Talk. Now, let’s get real about your money and your retirement.
Brian Graff: 0:28
Hello, friends, and welcome to another episode of the Real Talk Retirement Show. This is season two, episode two, and we’re delighted that you joined us again. We are Brian Graf and Tracy Burke, as always, from Conrad Siegel. And uh we have another good topic for you today. I guess I’m I’m biased, Tracy. I think they’re all good. I probably say that at the beginning of every podcast we do. But uh this this is one that that I really like because as a retirement coach at Conrad Siegel, I get these phone calls all the time. And and that is from the people who are maybe getting closer to retirement and they’re you know, they they want to know if they’re doing enough, and and oftentimes they feel like they’re not doing enough. So with that in mind, we’re calling this episode uh Saving for Retirement when you’re older and need to catch up. So, you know, today’s episode is really for anyone who feels a little bit behind, late to the game would be another way to describe it, or just worried that retirement might be out of reach. Uh and by the way, for those of you who don’t feel behind, uh definitely stay tuned because there will be some tips uh for you as well later in the episode. But you know, let’s let’s start with a quick question. So I do ask that all our listeners are are honest with themselves for this one. Uh, but when you hear the word retirement, do you feel excited or slightly panicked? And I’m guessing it’s probably a combination of the two for for a lot of people. And you know, Tracy, I spoke with uh someone recently, and we’re gonna call him Mark just to protect the uh the innocent. Uh, but Mark is 53 years old, and I remember that because he’s exactly one year older than me. Um, and you know, he had a successful career. It seems like he’s got a great family life. Uh, but once we kind of got through the uh the introductions and the formalities of the conversation and we started looking at his retirement account, I I could almost feel his stomach drop right through my phone. And you know, what he said to me, which I’m I’m paraphrasing a little bit, was something like, I feel like I missed the boat. You know, everyone else I know started saving at 25. I didn’t. Right. So if that sounds familiar to our listeners out there, trust me when I say you are not alone. And more importantly, you’re not out of options.
Tracy Burke: 2:45
Yeah, that that’s that’s absolutely right, Brian. Uh, they are not alone. Um, so yeah, today, you know, we’re gonna talk about why catching up is is really more common than most people would think, right? Um, and we’re gonna figure out, you know, what actually matters most at this stage of life in the game and and and offer some real practical steps that that folks can take. Uh we’re already now. Um, so again, you know, just to reiterate to our listeners, Brian, as you mentioned, you know, throughout today’s conversation, uh, we’re gonna talk about you know strategies you know for preparing uh for retirement really later in in your career. And as you mentioned, this not only applies just to those that may have that feeling of, wow, I’m I feel behind, but it really applies to everyone else as well. So it’s you know, it’s a universal thing, uh, no matter how much you’re making or what your income levels are. Uh so really, you know, what I’m trying to say is this is not an episode about guilt or missed opportunities either, right? It’s really about taking control and then just making the most of the time you still have.
Brian Graff: 3:54
Yeah, absolutely. And like I said earlier, you’re definitely not alone. And, you know, people ask the question, what’s what’s normal? And the truth is that many people, many people don’t start seriously saving for retirement until their 40s or their 50s. Um, you know, we all know that life happens. Uh, raising kids, they’re expensive. Trust me, I can attest to that. Um, paying back student loans, we have car loans, mortgages, saving for college. I could go on and on and on. Uh, even possible career changes uh may set back your finances a little bit. Uh other people struggle with divorce or caregiving challenges for their children or possibly even their parents. So tremendous challenges exist for many people. So, you know, in a lot of ways, Tracy, this is not your fault.
Tracy Burke: 4:41
Absolutely. And and as a financial planner, you know, we often talk about that importance of starting early, you know, and and we hear that in in in you know, through folks hear that through their employers and through other advisors. Oh, you got to start, you know, um super early to be successful. And while it’s true and and it it’s it’s more helpful, likely the earlier you start, um, you know, that’s sort of that perfect retirement saver. Um, you know, sort of that one that starts at age 22, you know, saves, you know, whatever, you know, that 10 to 15% number of the retirement income. They never stop saving, they’re never making mistakes. You know, the truth is that that person really rare rarely exists, right? You know, it’s not such a common thing. That that’s almost uncommon. So this starting later is normal because of a lot of those reasons you mentioned, Brian. Uh, but the real danger is not, you know, when you sort of realize it, is making adjustments, um, you know, and and and do some planning, obviously, if you’re able to.
Brian Graff: 5:51
Yeah, for sure. And you know, if you uh if you happen to be in your 20s and you tuned into this episode of the podcast, although the uh the title or the subject matter might not have attracted you to it, but I I hope you’re here. I hope you’re listening. Definitely do that. Do what Tracy said. Start saving when you’re early. You definitely will be thankful that you did. But we realize that uh most people, I you know, I don’t want to say all, but but certainly quite a few people are in the situation where we said they start later in life. Um, however, Tracy, you do have three advantages when you’re in that situation, when you’re in your 40s and 50s. The first advantage to kind of catching up on your retirement savings is that these are typically your higher income years, right? So for most people, uh peak earnings years often happen later in your career, somewhere in your 40s, 50s, and your 60s. And because of that, that allows you to save larger dollar amounts, even if uh, you know, over fewer years.
Tracy Burke: 6:46
Yeah, that’s right, Brian. And something else, for those over the age of 50, um, there’s something called catch up contributions. And many folks are aware or know about this, but basically the IRS um and federal regulators uh set these standards up that allow retirement savers to do these catch up contributions. So again, starting in age 50, the standard is and and depends on if it’s your workplace retirement plan. So think your 401k, 403b, whatever your workplace offers, uh, to put some numbers to it here in 2026. Um the regular retirement account, workplace retirement account account uh contribution amount is$24,500. Now, again, there’s people saying, well, that’s outlandish. I can never get there. But let’s, you know, assume it’s maybe later in life, or ideally you can get there at some point, right? Um, if you max that out$24,500, those over$50 can catch up and add an extra$8,000. So that amounts to$32,500 here in 2026 that people age 50 or over can save in their workplace plan if their finances and their situation allows. Um, now, if you’re thinking, well, I don’t have a workplace plan or I have an IRA and I what can I do in my IRA? Those numbers are less. But uh the regular contribution in an IRA this year is 7,500. The catch-up is actually 1,100. And that started to inflate this year for the first time. It’s been uh 1,000 for quite a few years. It’s going to inflate each year. So$7,500 normal plus the catch up of$1,100 takes us to$8,600 as a, you know, as what age 50 do. And then, of course, to complicate things, and sometimes government can uh make things uh less easy, but uh this came from a law that was passed, I think it was in 2022, a couple years ago. Uh they added a bonus. So um they picked the ages 60 to 63. So that’s a four-year period of time, right? The the inclusive age is between when you hit 60 and through age 63. Uh there they allow you to save an additional, on top of what those numbers we just mentioned, another$3,250 on top of all those numbers we just talked about. And then all of a sudden, when you turn 64, assuming you’re still working, you go back to the normal catch-up one. So it’s it’s it’s really a quirky part of the rule. And frankly, I think to those of us who are in the business of of administering it, it’s just another complexity. But that’s that’s how the rules work. And, you know, again, the federal government really designed these catch-up rules and you know, catch-up contributions to help people uh that might have more cash flow as they get closer to retirement and help those late starters.
Brian Graff: 9:54
Yeah, great point. Definitely though. But 60 to 63, that’s a head scratcher a little bit, Tracy. Like, why those exact years? We don’t know, but it’s a good thing, right? So any chance you have to save additional money for retirement, we’re not gonna scoff at too much there. Um, the next advantage you have later in your career. I don’t know, Tracy, what’s the expression with with age comes wisdom? Yes. Still maybe waiting for that to kick in a little bit. So I’m gonna soften that statement and say that oftentimes with age comes a clearer perspective on things. So for most people, your financial well-being is likely better later in your career, and you likely have a clear sense of your financial priorities. Children are out of the house, hopefully. Uh, debt may be significantly lower, you know, so forth and so on. So it’s just easier to get a clear perspective on finance. If you learned a lot over the years, hopefully life has gotten a little bit easier, financially speaking. Um, and that that’s really important later in your career. Uh, you also may be more grounded, we’ll say, with your investment portfolio. Uh, since you’ve likely experienced many ups and downs over your investment lifetime and learned a lot of lessons along the way, you may be less likely to either panic during times of market turmoil or maybe less likely to chase some of those riskier investments.
Tracy Burke: 11:12
Yeah, and and Brian, thinking about you know being a little bit um, you know, having that clearer perspective as you get older. Um, my wife likes to remind me that that men take longer to mature, right? So we’re a little bit behind our female counterparts there, and I think she’s still waiting for me to grow up in a lot of ways. We’re all in the same boat, Trace. I can’t argue that at all. Yeah, yeah. So uh the other thing that that you know, this is gonna come a shock to, you know, to to to our listeners likely, uh, but um, and and I say that facetiously, but you know, it’s so important to do some planning. Once you sort of are in this, you know, at any stage, uh, you know, planning is important. But especially if you come to that realization or the later years in retirement, whether you’re you feel prepared or not, do some planning. You know, this is when you need to figure out what you need to do. Uh it’s not just you know as simple as, well, what’s my number? How much do I need, or how much should I have by now? Right. There are benchmarks, and and that’s sometimes where you’ll see a benchmark and think, okay, here’s my age, and it says I should have this amount of time of my income or whatever the dollar amount is. And wow, I don’t have that. Uh, but really focusing, you know, do the planning, think about what your financial future should look like. Uh so things like, you know, figuring out what your you want your retirement to look like, what that desired lifestyle is. Is it sitting on a beach? You know, is it having a second home? Is it none of those? Is it much simpler than that? Um, so it’ll guide what what you’re really you need, you know, that that lifestyle, of course. Uh expected, you know, when when you want to retire, the when behind it, right? What age you want to go out. Um, and do you have flexibility with that? Um, you know, from that perspective. Uh what are you what are your income sources, you know, besides maybe your investment, your 401k or other uh investments, you know, what what’s what can you count on from Social Security? Uh now, if you know folks are like, I don’t know, how do I know that? Um, you know, a quick aside, SSA.gov, Social Security Administration, that’s what SSA.gov stands for. You can log on if you haven’t, and it’ll give you a retirement estimate and all those, uh, you know, it’s a secure website, and that’s a good way to check that out. Uh, but besides figuring out what you could expect from Social Security, your pensions, maybe you’re gonna work part-time in retirement. Uh, maybe you have rental properties that are gonna provide income. So again, just figuring that out. And then I would just say once you’ve you’ve taken that inventory and really got a better sense of what your goals are and what you have and what you can expect. Um, you know, as we talked about preparing for today’s conversation, Brian, we came up with three important levers that we believe people can use. So, Brian, why don’t you walk us through that first lever?
Brian Graff: 14:08
All right, but I’m having a hard time concentrating, Tracy. You mentioned retiring to the beach. And, you know, Tracy and I are here in central Pennsylvania. We’re supposed to get over a foot of snow in the next couple days. So yeah, yeah, the retiring to the beach sounds phenomenal. But I’m gonna try and get back and and focus on the rest of the podcast, Tracy. Yeah. So uh Tracy just said we have three important levers that we can use. The first lever is your savings rate, and it’s probably the most important. And the reality is, and you you may not like hearing this, but you simply will likely have to just save more. I know that isn’t easy, but hopefully, again, you’re in a position to redirect some of your current cash flow to more retirement savings. Uh, you know, consider increasing your retirement contributions anytime you get a raise or a small bump in pay, or if you get bonuses, those are great times to put extra money into your retirement savings account. Or, you know, like we said earlier, hopefully your budget allows you to save more coming down the home stretch of your final working year. So really super important save, save, save.
Tracy Burke: 15:10
Yeah. So lever two is time. Um, and and we would say even just a little bit helps. So besides that saving more that Brian just talked through, you you know, you can or may need to work longer than planned or desired. Now, sometimes the longevity at our work might is sometimes is out of our control for a variety of reasons, health or other issues, right? So maybe this is we can’t always count on it, but if that is available, uh sometimes, you know, just extending the amount that that we want uh to work uh could do it. And and and even and we’re not talking like a decade, you know, we even a couple years, you know, for for many, two or three years working uh you know longer often dramatically improves that outcome. And and we’ve talked quite a bit in the past, um, you know, Brian, about compounding, how compounding effect and the compounding interest, right? Uh and it, you know, it just simply means that um you won’t need to provide retirement income if you do work an extra two or three years. It’ll be for two or three years less, of course. Uh, but also those additional savings and the investment growth and the compounding of all those during those extra that extra period of time, those extra few years, simply means more income to take. So by working longer, you know, it also can affect that social security component. Um, you know, if you can delay social security because you’re working a little longer, sometimes those things can be a little bit helpful. So time can also be a lever to pull on.
Brian Graff: 16:47
For sure. So save more, save a little bit longer. And then also our third and final lever would be, you know, take account of your investment strategy. Maybe it’s time to review this again. And we do recommend at least once a year you’re looking at your investments. So hopefully you have been along the way. But again, for those who are late in their careers, approaching retirement, feel a little bit behind, you know, you may need to make some changes to your investment portfolio to balance your growth and your risk goals. So this could mean potentially investing slightly more aggressively, but still with a nice diversified, disciplined approach. You know, still avoiding those ultra-risky, Hail Mary type of investments, right? Uh, where you’re trying to make all the money back quickly. And that we all know can often backfire and even do more damage than it does good.
Tracy Burke: 17:38
Yeah. So uh so three important levers that that are at you know, folks’ uh sort of disposal at that point in time. But let’s let’s talk as we’re sort of coming down a home stretch, talk about common mistakes that sometimes folks will make when they’re in this situation where you know, maybe later in their career, uh, and again, it could apply if you need to catch up, or just in in general terms from there. So uh the first one, and this really piggybacks on what you were just talking about with investment strategy, Brian, uh, and it you know amounts to going too conservative too early. You know, we’ve we’ve heard you know, certain generations have that tendency to uh maybe, and rightfully so, feel you know that they need to be more conservative than maybe they really uh should be from that standpoint. So, you know, we just need to balance that need for growth with the need for safety. Um so that means likely a mix of both stocks and bonds, you know, those two main asset classes. Uh you can’t just, you know, when you approaching retirement in retirement, just throw everything into a bank CD and hope everything’s going to be okay. You still need an exposure to that uh and some investment risk. Uh the other thing I’m gonna also piggyback on what one thing you you I think you call it a Hail Mary type of investment, right? You know, and and it’s it’s you know, another common mistake is folks saying, well, I’m behind, so I have to take more risk. And I’m gonna chase some hot, what what you know are dubbed as those hot investments. Uh we would strongly advise stick with a tried and true approach uh and not that sort of hail Mary attempt. Um, you know, so that some maybe Hail Mary investments, you know, could be Bitcoin. Well, you know, they say Bitcoin is gonna grow to you know one gazillion dollars you know per Bitcoin in in coming years. So let’s put a lot of money into that. Or Nvidia is doing well, or whatever it might be. Try to avoid those. That’s really chasing hot investments. They’ve done well, uh, or at least some of those, um, the NVIDIA in particular, maybe not to Bitcoin, but you know, looking backwards, but is it going to continue going at that clip going forward? Likely not. So be tried and true approach there, right? And and then the other component um, you know, I uh I had on my list was ignoring taxes. You know, we see some folks that just don’t think about taxes, uh, especially as they get into retirement. Um, and so it’s an it’s an area that’s often underestimated. Um, so just having an effective strategy that deals with taxes effectively and efficiently is really important. So, Brian, noticed there were a couple of things that I was thinking of as common mistakes. What what are what are some other things that you can share?
Brian Graff: 20:30
Sure. So I think another big one is people tend to underestimate healthcare costs in retirement. It can be easy to do, easy to overlook, but it really can be a big part of your retirement budget. It’s healthcare is not cheap. And when your working days are over, maybe you don’t have that uh employer-sponsored and insurance program. You really need to know what’s under the hood and uh what type of programs are out there. So definitely don’t underestimate healthcare. Another thing I would tell everybody to avoid, I it’s that term we we say keeping up with the Jones’s Joneses, right? So don’t don’t compare your plan to what somebody else is doing or to somebody else’s plan. Uh don’t worry about what others think or what their plan is. Really just focus on what’s best for you and for your family. That’s that’s a huge one, Tracy, right? Don’t you get that a lot with your conversations with people?
Tracy Burke: 21:20
Yeah, yeah. It it’s it’s so easy to think about, well, geez, my neighbor, my friend’s doing this and whether it’s traveling or you know, all kinds of other stuff.
Brian Graff: 21:30
For sure. Okay, Tracy, let’s uh wrap up as we always do by giving our viewers some action items from today’s episode. Do you want to kick us off there?
Tracy Burke: 21:38
Yeah. So, you know, if somebody’s out there thinking and listening to this and and feeling, well, geez, this does apply to me, whether I’m closing in on a retirement or I, you know, I do need to play catch up or whatever it is. It’s just, you know, awareness is, of course, that first step, and then action is the next one. So I would just remind folks that it doesn’t have to be a perfect plan. You know, there’s some times in life where we try to think, okay, what we’re going to do, it has to be perfect before we can start going in that direction. And I would just encourage folks, it’s okay to be messy. You know, messy is perfectly fine. Uh, it’s better to be messy than perfect and and at least get a start uh with it. So uh and the key is as long as you’re making progress, right? So there have been a lot of people over time who started to save late in the game and have done very, very well and and met their goals. So again, it it can be messy. It’s not too late. What what are a couple, you know, maybe more tangible things, Brian, that you have?
Brian Graff: 22:39
Right. Well, the first one again is uh increasing your contribution rate whenever possible, uh, and definitely running some real numbers, whether you’ve got uh website tools available to you through your employer-sponsored retirement plans website, uh, or you go out there and search for some you know independent uh calculators online. Uh or definitely sitting down with a professional. We can’t stress that one enough that uh a good advisor is worth their weight in gold, especially later in your career. And with all this stuff, remember, yeah, this sounds a little bit bleak, but but the best time to start was years ago, right? Uh but the second best time is today. So don’t forget that. It’s never, never too early or too late to get started with your retirement goals. So, Tracy, thanks uh so much for being with me here again today. As always, we uh are gonna wrap up this episode two of season two now, but we do encourage all of our listeners to continue to reach out to us with questions or comments. You can reach us at podcast at conradsegal.com. We are truly here to help, which we sure hope you know by now. And definitely if you like this content, share it with your friends, your family, your co-workers, and you know, give us a five-star review if you’re so inclined, and subscribe if you haven’t already. Take care, everyone.
Intro/Closing: 23:57
Thank you for tuning into today’s show. The Real Talk Retirement Show is created and produced by Conrad Siegel, an advisory firm that specializes in helping people prepare for retirement and beyond. If you want to learn more about our work or meet the team, you can visit conradsegal.com. Information on this show is for educational purposes only and should not be considered personalized investment, tax, or legal advice. Before making decisions, you should consult with the appropriate professionals for advice that is specific to your situation.