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OK, you're in your 50s and employed, but you haven't put much aside for retirement. Is there any way you can avoid an impoverished old age or working until you drop?

The answer, fortunately, is yes.

Even those getting a tardy start in retirement planning can take advantage of tax breaks and make other moves to reclaim lost ground.

This may require substantial changes in lifestyle, but they're almost certain to be less painful than what might be required in 10 or 20 years if you don't start now.

"It's not too late unless you think it is," says Andrew Hudick, a financial planner in Roanoke, Va., who regularly counsel clients needing to play retirement catch-up.

The most important first step is to start saving. Now. Even if you haven't worked out a plan, that's all right. It can come later. But you're going to need the money.

We're not talking about the savings you get by forgoing twice-a-week visits to Starbucks (SBUX, news). Instead, you need to start saving a good 10% of your gross income, or more.

The essentials of saving money

Essentially, there are two ways to save. One is to pay down debt that has a high interest rate and isn't tax-deductible, particularly debt owed on credit cards. If you're paying 20% on credit-card debt, you effectively get a 20% return on every dollar of that debt you pay off.

The other way, of course, is to put money away.

This is where the tax code comes in. Take full advantage of your company's 401k plan, in which contributions are excluded from current income. It's nice, but not crucial, if the employer matches part of the contributions. If you're in a 25% tax bracket, a $10,000 contribution to your 401k reduces your taxes by $2,500.

Federal law allows workers who will be 50 by the end of the year to salt away up to $22,000 of their own contributions, pretax, for 2011. Investments in such retirement funds grow tax-deferred until they are withdrawn, at which time they are taxed at ordinary rates. While tax rates may go up overall, your own rate is likely to be lower in retirement, particularly given the late start you're getting on savings.

If your employer doesn't offer a 401k, open an individual retirement account at a mutual fund company or brokerage. Savers who don't have an employer pension plan can put away up to $6,000 pre-tax a year.

If you do have an employer pension plan, you can deduct the full contribution if your modified adjusted gross income is $89,000 or less for a couple, or $55,000 or less for an individual.

But you can make a $6,000-per-person, nondeductible contribution to a Roth IRA if you have a modified adjusted gross income of up to $105,000 a year -- or $166,000 for a couple filing jointly. (A Roth grows tax-free, and all withdrawals in retirement are tax-free.)

You can also fund tax-advantaged retirement savings with income from a second job or side business -- a good thing to build up now, since you'll want to continue earning something in retirement.

Say you're making $5,000 a year selling jewelry on eBay (EBAY, news). You may be able to put it all away, pretax, in a simple IRA or other savings plan designed for the self-employed.

Investing with a late start

How should you invest your retirement funds? Most 401k plans have a number of mutual-fund options, and money in an IRA can be invested almost anywhere. Due to the continued volatility of stock markets, Hudick recommends low-cost bond funds for savers who are just getting started. That's because the chance of a loss of principal is minimal with bonds. The last thing that older savers need is to see a portfolio losing 20% of its value in the next stock market bust.

As your nest egg grows, you'll want to look more closely at stocks. Low-cost index mutual funds can be a good place to start.

Perhaps the biggest problem in starting a retirement plan later in life is the loss of an opportunity to capture the magic of compound interest.

At a 5% annual growth rate, an investment doubles in size in 15 years; at 4%, doubling takes 18 years. But even if you're in your 50s, you can still take advantage of compounded returns. That's because your retirement is likely to run upwards of 20 years. That's a sufficient period for investments put away today to bear fruit.

As you get the savings going, it's time to figure out where you stand financially and what you'll need. It's not hard to draw up a family net worth statement listing assets and liabilities, and an income statement showing income and expenses over the past year.

There are competing rules of thumb about the proportion of current net income you'll need to sustain yourself in retirement, ranging from 60% to 80% or more. But if you're new to retirement savings, don't be paralyzed because you won't reach those goals. Simply do the best you can and keep in mind that you're not starting from zero.

Learn what you're entitled to

This is a good time to paw through your files and find evidence of pensions you may be entitled to. For example, you may well have earned a monthly stipend from a previous employer.

Even more significant is Social Security, which replaces 42% of the salary of a median wage earner who retires at the "full" or "normal" retirement age -- 66 for those born between 1943 and 1954.

Replacement rates are higher than that for low-wage workers and lower for high earners. Plus, the replacement rate is higher for one-earner couples when spousal benefits are factored in.

Every dollar that comes from Social Security is one less dollar you otherwise have to provide for. (You can get an estimate of your Social Security benefits here.)

Although you can start drawing early retirement benefits from Social Security at age 62, it pays to wait. Delaying benefits is crucial if you got a late start to retirement saving. Postponing the start of Social Security benefits until age 70 can boost the monthly payout by as much as 80%.

Here comes the tough-love part. You're going to have to reduce your style of living. It's as simple as that.

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Consider moving to a smaller home that's less expensive to own and operate, or even renting an apartment. (The first $500,000 of any gains on a principal residence sold by a couple is tax-free, meaning more to invest now.)

Even more dramatically, consider relocating in retirement to an area with a significantly lower cost of living.

It doesn't take a lot to start building that nest egg. A saver who puts $500 a month into a tax-deferred account -- assuming a 4% annual return, compounded monthly -- would have $74,000 in 10 years. That may not seem like much but, at current rates, that sum would buy a 68-year-old husband and wife an annuity paying out $433 a month for as long as either of them is alive.

This article was reported by William P. Barrett for Forbes.