7 Steps for Railroad Retirement Savers Who Started Late

Late to the Retirement Savings Game? Seven Steps to Help You Catch Up

Are you getting closer to retirement and realizing you haven’t saved as much as you hoped? You’re not alone—many railroaders find themselves in this position. While time is one of the most powerful tools for building retirement savings, there are practical steps you can take to strengthen your financial outlook, even if you’re starting late.

Below are seven actionable strategies to help you build your retirement nest egg and move forward with confidence.

1. Face Financial Reality

The most important step is also the hardest: understanding exactly where you stand financially. Take an honest look at your income, expenses, debts, and savings. If you haven’t been saving but expect a comfortable retirement, now is the time to make changes.

Avoid sticking your head in the sand. Clarity allows you to make better decisions.

2. Build a Better Budget

Knowing where your money goes each month is essential. A simple and effective budgeting framework is the 50/30/20 rule:

• 50% for necessities (housing, utilities, insurance)
• 30% for discretionary spending (dining out, travel, subscriptions)
• 20% for savings

That 20% may feel aggressive, but late starters need to prioritize savings. Identifying where you can cut costs frees up cash to invest in your future.

3. Use Dedicated Retirement Accounts

Take full advantage of retirement savings vehicles like IRAs and 401(k)s. These accounts offer tax advantages designed specifically to help you grow long-term savings.

If your employer offers a 401(k) match, contribute at least enough to receive the full match—it’s essentially free money.

4. Maximize Catch-Up Contributions

If you’re over 50, you can contribute more to IRAs and 401(k)s through catch-up contributions. These limits increase even further after age 60 and are adjusted periodically.

This is one of the most powerful tools available to late savers, so be sure to take full advantage of it.

5. Take Smart, Controlled Risk

Catching up doesn’t mean gambling your savings on the latest “hot” stock. Instead, focus on diversified, low-cost growth investments that align with your time horizon and risk tolerance.

Consistency matters. Keep contributing regularly and let compounding work for you over time.

6. Leverage Home Equity Wisely

Home equity can be a useful financial tool when used responsibly. For example, paying off high-interest credit card debt with a lower-interest home equity line may improve your cash flow and reduce financial stress.

For those nearing or in retirement, downsizing can unlock equity from a larger home and provide additional funds for investing or income needs.

7. Understand Your Railroad Retirement Benefits

Railroad Retirement provides guaranteed income, but timing matters. Retiring early can result in permanent benefit reductions—sometimes as much as 30%.

Before making a decision, understand how your retirement age affects your benefits and whether those payments will truly support your lifestyle, especially if your savings are limited.

Final Thoughts

Starting late doesn’t mean you’re out of options. By taking deliberate steps and staying disciplined, you can improve your retirement outlook. The key is getting started—today.

If you’re a railroader at or near retirement, consider going through a structured Railroad Retirement planning process to better understand your options and opportunities.

Until next time, stay safe, stay on track, and take care.

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved from Highball Advisors, and all rights are reserved.