Sep 8, 2025
As you get older, it's important to have more retirement money saved so you can start preparing for the day when you leave the workforce.
Americans believe they need $1.26 million saved to retire comfortably, according to a study by Northwestern Mutual. However, among those with retirement savings, 25% say they have one year or less of their annual income set aside for this purpose. In addition, 51% of Americans think it’s somewhat or very likely they will outlive their savings.
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So, what can you do if a close family member is far behind in their retirement savings?
Where do they stand?
Let’s say your mom is 50 years old, makes $45,000 a year, has only $15,000 saved and no IRA or 401(k) accounts. She’s obviously not on track to hit the above target.
Based on these figures, she’s also well off pace from her peers. According to the Federal Reserve’s latest Survey of Consumer Finances from 2022, people aged 45-54 have a median $115,000 saved in retirement accounts.
This data suggests a lot of other people are also behind schedule — but generally not as much as your mom. She’s going to need to do something to make sure she has enough money to live on when she decides to retire. And the sooner she starts, the easier it will be.
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What they can do to get back on track
To have a shot at a decent retirement, your mom may have to make some big sacrifices and potentially work longer than the traditional retirement age.
First things first, if your mom has a workplace 401(k) with an employer match program, she should open that account right away and start investing. She should divert enough of each paycheck to the 401(k) to at least earn the full match amount. This essentially equates to free money from her employer she can’t afford to pass up.
Otherwise, she should consider opening an IRA, another account that can be invested in the stock market, so she can start potentially getting a higher return on any savings than she would by keeping money in the bank. The S&P 500 has historically earned roughly 10% a year on average. But beware, past returns don’t guarantee future success.
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Both 401(k) and IRA accounts have annual contribution limits — $23,500 and $7,000 in 2025, respectively — but since your mom is 50 years old, she can make additional “catch-up” contributions of $7,500 and $1,000, also respectively. She may struggle to hit these limits with her modest salary, but it’s something to keep in mind.
Next, she'll need to figure out how much she can set aside for savings each month. This means building a budget, if she hasn’t already, to account for every penny spent. This would allow her to evaluate her spending and find areas she can trim in order to maximize the amount of money she can put toward her nest egg.
Once mom has done all she can to boost her savings and trim her budget, she may want to consider boosting her income, which would allow her to save more each month. She can try going for a promotion or looking outside her workplace for a new job with a higher salary. If she has free time to fill, she may also want to think about starting a side hustle. Increasing her income raises her chances of meeting her financial goals sooner and retiring at an earlier age.
To help her prepare for the reality of retirement, your mom may also want to consult with a financial advisor. They can prepare a strategy for them and offer advice on things like when to retire and at what age to apply for Social Security in order to optimize her retirement benefits.
Mom has a tough road ahead if she wants to enjoy her retirement, but the sooner she gets serious about her savings, the more secure she’ll be later on.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
