I’m 55 years old and I have $0 in savings, but I want to retire in 10 years — am I out to lunch? 4 simple steps to trade in that concern for confidence

In 2021, the average retirement age in the U.S. was 64.7 for men and 62.1 for women, according to research by the Center for Retirement Research at Boston College. But, according to the Fed’s latest Survey of Consumer Finances, 37.8% of people aged 45 to 54 and 43% of people aged 55 to 64 have no money set aside in dedicated retirement accounts.

So if you haven’t started saving yet, you’re not alone. But it’s never too late to get started.

You need a budget

If you want to retire in 10 years but haven’t set anything aside, you’ll need to figure out how much you’ll need in retirement. One popular strategy is saving enough to live off 80% of your pre-retirement income, but you can get a more personalized idea by tracking your expenses for a few months and then estimating how those will change in retirement. For instance, your housing and tax expenses may fall, but your medical and leisure spending may rise.

When you’ve determined the income you’ll need to retire, you’ll need to calculate how much of this will need to come from savings. Remember that you’ll probably be getting at least some income from Social Security. As of March, the average monthly Social Security benefit for retired workers was $1,913.31. You can estimate how much you’ll be getting by setting up a my Social Security account.

From there, you can determine how much you’ll need to save in total. A common way to do this is to use the 4% rule. This assumes that you’ll withdraw 4% of your savings in the first year and then adjust this amount for inflation each year after. So, if you need $3,000 a month to come from savings, you’ll need a savings balance of $900,000.

You need a plan

If the number you arrive at seems impossibly high, then you may need to readjust expectations for your retirement lifestyle. This might mean traveling less in your golden years, or it could require more drastic changes, such as downsizing your home or even moving to a less expensive city or state once you retire. You might also want to consider working part-time during retirement, at least for a few years. It could be worth sitting down with a financial planner to set up a savings and investment plan that will help you reach your goals.

You need to save a lot

Once you have a savings plan, the hard work begins. You’ll need to save a lot in a relatively short period of time, which means you’ll need to cut your expenses.

You may need to live on as little as 25% of your income, which will require you to be fully committed to your plan. To help get you there, you may want to consider making lifestyle changes, like relocating, taking public transportation instead of driving and forgoing expensive entertainment.

Make sure your savings are working hard for you

You’ll also need to get the most you can out of your savings. Make sure you’re maxing out your retirement accounts and, if you’re over 50, take advantage of catch-up contributions.

Talk to a financial planner to set up a portfolio with the appropriate return and risk characteristics for a 10-year end date and then again when to optimize the portfolio and your withdrawals to minimize taxes and ensure the longevity of the portfolio in your retirement.

Retiring in 10 years with no savings will be challenging. But with the right mindset and discipline, it’s possible.