How to Ramp up Your Saving Now that Your Kids are in College


By the time that your children are going off to college, you have probably been working for over two decades and struggling to put money into your retirement account. A lot of what should have been saved will have gone into family health care, education, a home, and numerous other family expenditures. Now that the kids no longer fully rely on you, you have an opportunity to play some catch-up and ramp up your retirement savings. Here are some tips to get it right at this stage and build a nest egg for the coming decades.

How to Ramp up Your Saving Now that Your Kids are in College

Make “Catch-up” Contributions on Your Retirement Accounts

If you are over the age of 50, you are still allowed to make an extra $6,000 in “catch up” contributions into your company-sponsored 401 (k) plan and other retirement accounts provided by your employer, such as 403 (b). This is on top of the $18,000 limit that you are allowed to contribute into these retirement accounts when you are over 50.  Therefore, you could end up saving up to $24,000 per year in employer-supported plans once your kids are in college.  If you were unable to previously max out on these contributions because of your spending on the kids, this is the time to plug the hole and build up decent savings for your retirement. You could also make “catch-up” contributions of $1,000 per year into a traditional IRA and a Roth IRA once you have maxed out on the $5,500 limit for these retirement accounts.


You probably purchased or rented a bigger home because of the kids. Now that they are all grown up, it is time for your next act. Talk with your spouse and kids and plan a move into a smaller home or even a townhouse to free up some money. If you are still refinancing your mortgage, look for mortgage refinancing options that will reduce your debt burden. You can shop for low mortgage rates at a website such as

Wind Down on Your Debts

Many Americans are paying off their student loans into their 50s. At this time, you might also be grappling with other debt obligations from the years of “big spending” such as car loans and credit card loans. This is the time to begin winding down those high-interest debts so that you can focus on saving money for your retirement. You wouldn’t want to carry forward so much debt into your 60s and 70s!

Work Beyond Your Official Retirement Age

Working beyond retirement age allows you to continue making contributions into your 401 (k) plan, which will help you build substantial savings. By working longer, you can also rely on an employer health plan until you hit the age of 65, at which point, you will be eligible for Medicare.

Re-evaluate Your Lifestyle

If you have been lucky enough to hold down a good job, perhaps your lifestyle has involved regular vacations, dining out and various other discretionary spending that ate into your income. Now that the kids are gone, it’s time to re-evaluate your lifestyle and eke out a more frugal existence. There are things that you could do without and still enjoy a comfortable lifestyle. The extra money saved could go into investments or your retirement account.

Financial security is not just about saving money, but also your attitude towards risk. At this point in life, you are probably at or past the peak of your career. From this point onwards, things will only go “downhill” until you reach the point when you exit the workforce. While you might try out new things, you cannot afford to take a big financial gamble at this time. Try to maintain a more conservative asset mix in your portfolio to minimize your risk exposure.

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