The Dolan Retirement 'Catch-Up' Plan

In Your Fifties

By now you should have a sense of how much money you'll need when you retire. If you save $5,000 a year, assuming a 5% annual return, you would retire at 70 with a nest egg of about $175,000. If you know you'll need more than $175,000, you'll need to increase the amount you save each year. Can you save $7,500? $10,000? Every bit helps.

At this stage, you want to invest as much money as possible in tax-deferred retirement accounts. You also want to start getting more conservative. Invest in stocks that pay dividends and high-grade bonds, plus a strong component of Treasuries or money market funds.

In Your Sixties

At this point, you may already be withdrawing money from your retirement savings. Be sure to have your retirement dollars in the most conservative of investments. We're not going to give you portfolio allocations because, as much as we dislike giving such advice across the board for investing, we like it even less when it comes to retirement portfolios. Our generic rule of thumb is DON'T RISK YOUR RETIREMENT MONEY! That's true for any age, but especially when you're this close to retirement.

If you're in your sixties or older and you still need funds for your retirement (and who can't use a few more bucks?), there are several measures you can take now. One great place to look is your home. If it has appreciated since you bought it, you can sell it and pocket gains of up to $250,000 for individuals, or $500,000 for couples, without paying capital gains taxes. If you move into a less expensive home, you can put the gains into your investment portfolio.

If you find yourself house rich but cash poor, and are having trouble maintaining a reasonably comfortable standard of living, you might consider a reverse mortgage. This is a loan that allows homeowners 62 and over to start receiving the equity they've built up and still live there. You have to pay back the loan, but it isn't due until you die or move out–at which point the house is sold to cover the loan.

A federally insured home equity conversion mortgage can be paid in a lump sum, monthly installments, or used as a credit line to draw from as needs arise.

For an emergency fund, take out a home equity line of credit. It's easier to qualify while you're working. Don't use it unless you have an emergency, but have it as backup.

That covers the basics. If you'd like to learn more about the specifics of retirement saving, please check out these links:

• Transferring Your 401(k)
• Social Security 101
• Pros and Cons of 401k Loans