If you are behind on saving in middle age, many financial advisors believe there is still time to increase your savings rate and map your later years, writes Hannah Miao for The Wall Street Journal.

In 2023, the median account balance of workers between 45 and 54 years old in employee-sponsored retirement plans such as 401(k)s at Vanguard was roughly $60,000. That is significantly below the usual target of having around six times your salary saved for retirement by 50.

The best way to improve your retirement prospects is to make some changes immediately.

“The best day to start was yesterday,” said Dann Ryan, a wealth manager and managing partner of Sincerus Advisory. “The second-best day is today.”

The first step, according to financial advisors, is to thoroughly assess your finances, starting with your spending. This will allow you to understand how much you are spending on necessities, and how much you are spending on everything else. Knowing this, you will be able to estimate how much money you will need in retirement and what you can cut back on to save more.

Financial advisors also recommend adding up your retirement savings and expected income, in case you lost track of 401(k)s from earlier in your career that you did not roll over into new accounts.

When you know how much you will realistically need in retirement and how much savings you have, you will be able to calculate how much you are missing and start saving.

To help with reining in your spending, advisers recommend automating the whole process as much as possible by setting contributions to 401(k)s and transfers for retirement, brokerage, or savings accounts to happen automatically at regular intervals.

Fred Hubler, the CEO and Chief Wealth Strategist at Creative Capital Wealth Management Group in Chester Springs, offers his clients practical advice for saving.

“Just as no one enjoys dieting, budgeting can be a chore,” he said. “Instead of stressing over strict limitations, we encourage clients to make the most of their current situation by setting a minimum savings goal of 10 percent.”

Hubler said another effective approach is to view your life as a business.

“Consider your income and explore ways to increase it through a new job, promotion, additional training, or certifications,” he said. “Additionally, scrutinize your expenses, as many of us unknowingly subscribe to numerous services that accumulate over time. Remember, saving 10 percent of your income when you earn $10,000 is a much more achievable goal than attempting to save 10 percent when your income reaches $100,000.”

Read more about how to plan for retirement in The Wall Street Journal.

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