How To Play Catch-Up on Savings If You’re Behind

It’s never too late to start planning for retirement. Practicing good money habits and best practices can give you some momentum. Ultimately, playing catch-up will give you more choices when you reach retirement age.

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While Gen Z individuals have plenty of time to build their nest eggs, Gen Xers don’t have as much time. Here are strategies that can help Gen X play catch-up with their long-term financial goals.

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Contribute As Much As You Can to Your Retirement Accounts

“Gen Xers who want to max out their retirement savings can begin by maxing out their 401(k) or IRA contributions. The under-50 bracket is allowed to contribute up to $23,000 in a 401(k) and $7,000 in an IRA. Gen Xers over 50 enjoy catch-up contributions of up to $7,500 per 401(k) and $1,000 per IRA,” said Erika Kullberg, personal finance expert and founder of Erika.com.

While some people manually contribute to their retirement accounts, it’s also possible to have those contributions happen in the background. That way, you won’t forget to contribute to your retirement accounts each month. Then, you are more likely to max out your retirement accounts each year.

“Automatic contributions help with steady savings and bumping up the contribution rate at year-end or when you get a raise can continue to add savings without adding a hiccup to your spending habits,” said Kullberg.

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Adjust Your Investment Strategies

Mason Jones, a managing director and affiliate expert, has a portfolio of over 20 high-earning websites at NDR. He believes in prioritizing assets that have been proven to reward long-term investors.

“For Gen Xers, a few key investments can really help build toward a solid retirement. Diversifying into low-cost index funds can provide steady growth over time. Real estate is another strong option–it can generate passive income and offer long-term appreciation. Contributing to a Roth IRA is also beneficial, especially since Gen Xers can take advantage of tax-free withdrawals in retirement,” said Jones.

While bonds are less risky, they tend to underperform stocks and real estate, especially in the long run. You don’t have to take high risks, especially if you’re a Gen Xer who is playing catch-up.

Kullberg recommends investing in multiple asset classes based on your risk tolerance and preferences.

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“Gen Xers will want to diversify their portfolios with the appropriate mix of stocks, bonds, and assets that suit their risk profile. Funds like index funds, target date funds and dividend stocks can provide growth with a healthy dose of risk management. Others may also want to look into real estate investments or REITs to fund income-producing portfolios.”

Real estate and real estate investment trusts (REIT) are some of the income-producing assets you can choose. It’s also good to consider how each of those assets will get taxed. For instance, you won’t pay as much taxes on qualified dividend distributions as you would from REIT distributions. Interest and REIT distributions are taxed as ordinary income, while qualified dividends are taxed as capital gains.

Delay Retirement

Staying in the workforce for a little longer will give you more time to build up your savings. Your money also won’t have to stretch as far out if you continue to earn steady paychecks. Jones recommends that Gen Xers pick up new skills and explore additional income streams while they are still employed.

“One of the biggest lessons I’ve learned while building wealth–both through affiliate marketing and more traditional investments–is the importance of diversifying. I’ve learned that investing isn’t just about putting money into something and hoping for the best. It’s about being proactive and involved. The more I educate myself, the better equipped I am to make decisions that align with my goals,” said Kullberg.

She highlighted some of the additional perks of delaying retirement: ultimately, you can make and save more money in the long run by sticking with a career a little longer.

“For just a couple more years of work, you’ll give your investments some time to recover and you won’t need as many years in which you’ll be dipping into savings,” she said. “Also, you could increase your Social Security payments, if you [delay withdrawing]. The extra 2 or 3 years that you delay retiring from your job could be a huge difference in retirement income.”

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This article originally appeared on GOBankingRates.com: Retirement for Gen X: How To Play Catch-Up on Savings If You’re Behind