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No savings at 50? Here are my two tips that can help you still retire in comfort

The western world boasts the wealthiest nations and citizens on earth, but many people  are struggling to save enough cash for even an emergency fund. Skipton Building Society commissioned a report on British saving habits in 2018 and found one in 10 respondents admitting to spending more than they earn.

Alarmingly, the study found that one in 10 adults over the age of 55 don’t have any savings put away for their future. The Money Advice Service recommends having three months of expenses for emergencies, let alone anything you might need to fund your entire future. But if you are an investor who is 50 or older and without any savings, there is still a path forward to help you twards a more comfortable retirement.

There are basic steps that you can take to reach short-term goals. Crafting a budget is one way to gain control of your finances. 

Make saving a habit

Once you have built a budget, take time to prioritise your savings. Debt reduction should be a top priority before you can start to build your nest egg. When you have achieved stability, it is time to make saving a habit.

Money management is stressful. Take the pressure off and consider starting a savings account that automatically siphons your cash into a savings vehicle. A monthly deposit adds up quickly, and it allows you to ‘pay yourself’ first.

Put your money to work for you

But how exactly should you save to make the most of the nest egg you are building? Well, I think a Stocks and Shares ISA is the way forward as it is a great way to keep your gains from the taxman.

But if you have failed to build savings into your 50s, now is not the time to push forward with an ultra-aggressive approach that focuses on risky growth stocks. A growth-oriented strategy can be lucrative in the long term, but this high-risk method can squeeze investors who are closer to retirement.

Dividend stocks will make your money work for you as you look to build up your savings. I would want to target dividend stocks with a wide economic moat. A share like British American Tobacco (LSE: BATS) offers the wide economic moat that I am looking for. The company manufactures and sells cigarettes and other tobacco products. It has been forced to readjust its revenue projects for its e-cigarette arm due to the intense backlash against vaping in the US. It is now projecting revenue growth in the lower end of its 30% to 50% forecast.

The setback is unfortunate, but BATS still looks strong as we look ahead to the 2020s. Its shares have climbed 13% year-on-year, but it still offers nice value. The stock had a price-to-earnings ratio of 11 as of close on November 27. Of course, we can’t forget about its income. British American Tobacco stock boasts an annual dividend of 203p. This represents a tasty 6.7% yield.

Other top shares include names like Unilever, Diageo and Vodafone. Along with BATS, they are all FTSEO100 shares. And if you want to make your savings even easier and to spread the risk more widely, you could try a FTSE 100 tracker that apes the performance of the entire index of the UK’s top shares. An accumulation version will allow you to automatically reinvest your dividends until your retirement.

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Ambrose has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.