If you’re behind in your saving and investing for retirement, you’re not alone. According to the 2024 Retirement Confidence Survey, fully 47% of workers have less than $100,000 socked away, and 29% have less than $25,000. Yikes!

Even if you have, say, $500,000 saved, that might be far from enough. After all, if you apply the 4% rule and take out 4% of that in your first year of retirement, adjusting future years’ withdrawals for inflation, you’ll only get $20,000 in your first year. Couple that with the average annual Social Security retirement benefit of around $23,750 (as of January), and you’re looking at $43,750.

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Most retirees will need or want a lot more than that amount. Here are some ways to improve your financial situation.

1. Know what’s possible

First, get inspired. Check out the table below:

Calculations by author.

Clearly, a lot of money can be amassed over time. Invest even more than the $7,500 or $15,000 sums above and you can top those numbers. You will need some time, though. By the way, I used an 8% growth rate because while the S&P 500 has averaged annual returns of close to 10% (ignoring inflation) over long periods, it’s far from guaranteed.

2. Create a household budget

If you’re aiming to save and invest meaningful sums, you’ll likely need to spend less and save more. So take some time to set up a household budget. You’ll need to track your spending in detail for a month or two, to figure out exactly where your money is going and to be able to identify where you might cut back.

For example, you may notice that you’re paying certain sums every month for memberships, services, or subscriptions that you don’t use. You may notice that some expenses — perhaps your cable TV? — are just too high. Once you have a handle on your spending, set up a budget so that your money is going where you want it to go. Budgets can keep you from overspending and going into debt, too.

3. Try to earn more

There’s only so much spending you can cut, so another smart move is trying to bring in more money. You might start by simply asking for a raise. Requests for raises are granted more often than many people think. (It helps to deserve the raise, of course.)

Depending on how far away retirement is, you might earn a professional designation or certificate that could qualify you for a higher-paying job. Taking on one or more side gigs for a while can also generate extra dollars that can be invested for your future. If you can bring in, say, an extra $200 per week, that’s more than $10,000 extra to be saved and invested.

Image source: Getty Images.

4. Park long-term dollars in stocks

If you have at least five, if not 10, years before you retire, investing in stocks is likely a smart move. (Due to the market’s volatility, don’t invest with dollars you’ll need in the next five or 10 years.)

Wharton Business School professor Jeremy Siegel has studied the history of investments and found that over the 75 years between 1946 and 2021, stocks grew at an average annual rate of 11.3%, versus 5.8% for long-term government bonds (excluding the effects of inflation). The lesson here is that stocks outperform bonds over most long periods.

5. Favor index funds

Once you’re on board with investing in stocks, you might keep your risks reined in a bit by sticking with one or more low-fee, broad-market index funds such as one that tracks the S&P 500. The Vanguard S&P 500 ETF (NYSEMKT: VOO) is a fine option, with ultra-low fees.

Index funds are hardly a compromise, too, as they tend to perform quite well over time. According to S&P Dow Jones Indices, over the past 15 years, the S&P 500 index outperformed a whopping 89.5% of managed large-cap mutual funds, and it outperformed 84.3% over the past decade.

6. Consider delaying your retirement

Another powerful move if you’re behind in your saving and investing for retirement is to delay retiring for a few years. For each year that you do so, you’ll be able to save and invest more money — and your portfolio will have another year in which to grow for you. But wait, there’s more! Your nest egg will need to support you for fewer years, too, and you may be able to remain on your employer’s health plan longer, saving money.

7. Have a retirement plan

Finally, while all these strategies are great, they may not serve you as well as they could if you don’t have a solid retirement plan in place. Take some time to figure out how much you’ll need in retirement and how you’ll get it. (It might be best to set up multiple income streams, such as dividend income, annuity income, retirement account withdrawals, and so on.) Also, decide on a withdrawal strategy that can keep you from running out of money prematurely. Don’t leave your retirement up to chance.

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Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.