About 4.2 million Americans will turn 65 this year. While not all of them will retire right away, they’re getting close. And yet, Americans don’t appear to feel optimistic about their financial readiness. A recent Gallup poll showed that only 45% expect to be financially comfortable in retirement.

If you’re one of the majority who wonder if you’ll be ready, it may be time to try a hack or two.

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Give yourself more time

Let’s look at those 4.2 million Americans who will turn 65 this year. They were born in 1960, the year John F. Kennedy was elected president, the Civil Rights Act was signed, and U.S. military advisors first arrived in Vietnam. If you’re young, that may seem like ancient history, and yet to those of us born around that time, it sometimes feels like yesterday.

In other words, when you’re busy living, life can pass in a blur, and a few years don’t feel like an eternity. If you’re physically able to continue working, consider how much difference several more years of contributing to an individual retirement account (IRA) can make.

The following tips can help you make the most of a traditional IRA.

Image source: Getty Images.

The difference a few years can make

Imagine you were born in the middle of 1960 and will be eligible for full retirement benefits at age 67, the year those born in 1960 and later become eligible. You got a late start and began investing in a traditional IRA at age 55. Fortunately, since you were over 50, you were able to max out annual IRA contributions and add catch-up contributions. Here’s how much you’d have contributed each month to an IRA earning an average return of 7%:

Data source: Calculations by author.

Thanks to the power of compounding, you would have entered 2025 with $94,929 in your IRA. Since you plan on working until your full retirement age (FRA) anyway, you estimate how much you’ll have in 30 months (the month you turn 67 and plan to retire). The amount you come up with based on an average 7% annual return and 30 more months of IRA contributions is $133,497.

That’s better, but if it’s still not as much as you’d like, take a look at your current situation to determine whether working until 70 makes more sense. Not only do Social Security benefits increase by 8% each year when you postpone retirement (up to age 70), but your IRA is likely to be plumper as well. For example, working three more years and allowing your IRA to grow means having roughly $189,272, over $55,000 more than you would have saved if you had retired at full retirement age.

You don’t have to feel stuck in a rut

If you’re tired of your current job or simply don’t enjoy it, there’s no rule saying you can’t take on something new in the third act of life. Have you always thought it would be fun to work at your local zoo, or wondered what it would be like to teach as a substitute? As long as you earn enough to cover your expenses and continue contributing to your IRA, there’s no reason you can’t spend those last few “bonus” years doing something different.

Rather than viewing a few extra years in the workforce as punishment of some sort, why not think of it as an opportunity? You’ll earn more money, meet new people, gain new experience, and make your retirement years a little easier.

The $22,924 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income.

One easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Join Stock Advisor to learn more about these strategies.

View the “Social Security secrets” »

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