Making Up for Lost Time

According to a 2011 survey by the Employee Benefit Research Institute, 62% of workers ages 45 to 54 had $50,000 or less in total savings and investments. Meanwhile, among workers age 55 and older, 50% fell into that camp.

Even if your nest egg is above these levels, you may not have nearly enough set aside for retirement--and it may be time to play catch-up.

Those age 50 and above can do just that, thanks to the catch-up contributions they can make to Individual Retirement Accounts and to 401(k) and similar employer-sponsored retirement plans. Those 50 and older can put as much as $22,500 into a 401(k) in 2012, versus a $17,000 maximum for folks who are younger. The 50-plus crowd can also invest as much as $6,000 in an IRA, compared to $5,000 for those under age 50.

Let's say you maxed out your 401(k) every year for 15 years, starting at age 50. Assuming you earned 5% a year and you were able to contribute the full $22,500 a year, you would have more than $503,000 at age 65. Any matching employer contributions would be gravy, on top of what you save.

Fully funding an IRA could also add significantly to your nest egg. Once again, assume that you earned 5% a year. If you were able to contribute $6,000 a year for 15 years, you would have an extra $134,000 for retirement.

INVESTMENT PRODUCTS: NOT FDIC INSURED • NNO BANK GUARANTEE • MAY LOSE VALUE

These strategies do not necessarily represent the experience of other clients, nor do they indicate future performance or success. Investment results may vary. The investment strategies presented are not appropriate for every investor.

Citigroup Inc., its affiliates, and its employees do not provide tax or legal advice. You should seek advice based on your particular circumstances and about your eligibility to contribute to an IRA from an independent tax advisor.

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