NEW YORK (Money) -- READER QUESTION: My husband and I are 60 and 62. We're still self-employed in no-retirement-help non-profit jobs, still renting the same house where we raised five kids and have no retirement plan beyond an IRA and a little savings. We gross over $120,000 a year, but almost 40 percent goes to income taxes. Are we a totally hopeless cause? - T. M., Walnut Creek, Calif.

Pinched? Sure. In a tough situation? You bet. But hopeless? Not on your life.

At the risk of sounding Pollyanna-ish, I truly believe that no matter how far behind you may be, there is always something you can do to improve your situation.

So let's forget this talk about hopeless causes and focus instead on what you can do. Take a look at the strategies I've outlined below, and while you're at it read this recent article from Money Magazine, Age 50 and far too little saved. It discusses ways to quickly build a nest egg later in life.

You'll be surprised at how much you can accomplish even when you're getting a late start.

At your age, you don't have a lot of options, but you do have a few.

First, save your you-know-what off. Plow as much as possible into retirement accounts that give you a tax break. This will lower your tax burden, effectively making Uncle Sam a partner in your retirement-planning efforts.

Both you and your husband should each be able to sock away $5,000 a year in an IRA ($4,000 in regular contributions and $1,000 in catch-up contributions for people 50 and older). Normally, I recommend that in some years people do a Roth IRA instead of a deductible IRA. The Roth doesn't give an upfront deduction, but it provides tax-free income at retirement, which can be a plus, especially if you end up in a higher tax bracket.

Given how far behind you are in savings, though, I think you're much more likely to fall into a lower tax bracket.

You also may qualify for a SEP IRA, a retirement savings account designed for the self-employed or people who work for someone who is self employed. The beauty of a SEP is that you can put away much more than in a conventional IRA - as much as 25 percent of your self-employment income up to a maximum of $44,000.

That 25 percent is based on your net self-employment earnings after deducting the SEP IRA contribution. To figure out how much you can contribute, use this SEP IRA deduction calculator.

If you can, sock away more after maxing out tax-advantaged accounts, preferably by investing in low-cost, broad-based index or tax-managed funds that lower the tax bite by generating most of their return in the form of unrealized gains that won't be taxed until you sell. For more on these options, click here

Second, put off retiring. The next best way to boost the value of your retirement accounts is to postpone retirement for a few years.

It gives you a few more years to save and it gives your nest egg more time to compound.

So, for example, a 65-year-old with just $50,000 saved who puts off retiring for three years and saves $500 a month during that time could have $83,000 by age 68, assuming an 8 percent annual return. Maybe not a windfall, but it's an increase of 66 percent from what he had at 65.

Another plus: by working a few more years, you can postpone taking Social Security, which means you could qualify for a significantly higher payment.

If you delay beyond age 62, the first year you're eligible, your payment will increase by roughly 7 percent each year until you reach full retirement age.

If you put off taking benefits beyond full retirement age, your payment rises anywhere from 5.5 percent to 8 percent, depending on the year you were born.

To estimate what size payment you might get at various ages, check out Social Security's benefit calculators.

Invest aggressively, but don't go crazy. To boost the odds that your retirement stash will last 30 years or more and retain its purchasing power, you need to invest a sizeable portion of your assets in stocks.

How much depends not just on your age but your risk tolerance as well. But as a general rule someone in their early to mid-60s might keep between 40 percent and 60 percent of their retirement savings in stocks and the rest in bonds. (See how to allocate your portfolio at different stages of retirement.)

You may want to keep to the higher end of that range simply because you need to bulk up your savings. Remember, though, putting more of your money in stocks means the value of your savings will fluctuate more. So be prepared to accept some ups and downs without bailing out if you want the long-term benefit of higher stock returns.

Also be sure that you put together a diversified portfolio of stocks or stock funds. Don't try to pick hot growth shares or buy into the latest craze (gold, energy stocks, whatever) in the hopes of snagging big returns. If you invest too aggressively and things don't work out, your nest egg could end up shrinking instead of growing, and that's the last thing you need.

As you age, you can gradually scale back the amount of stocks in your portfolio. But even when you hit your 80s, you still want to have some money in stocks - say, 20 percent to 30 percent of your assets - to provide growth and inflation protection.

Monitor your spending carefully. Nothing can suck your retirement savings dry faster than overspending in the early years of retirement.

So try to limit yourself to an initial draw of about 4 percent or so of your assets. Then increase that amount each year by the inflation rate to maintain purchasing power.

Clearly, that may make for a tight budget. (Even with a million bucks, the initial withdrawal would be about $40,000 or so.) But you don't want to go through your savings so fast that you're living a decade or more of retirement on Social Security alone.

To see how long your savings might last at different ages and withdrawal rates, check out T. Rowe Price's Retirement Income Calculator. Revisit this calculator (or check with an adviser) every couple of years to make sure you're not going through your stash too quickly.

Work part-time Even if you're not earning mega-bucks, the extra cash will take some pressure off your retirement stash, letting it grow more than it otherwise would..

Of course, in some cases working can affect your Social Security benefits, either by reducing your monthly check or triggering taxes on what you collect. For details, click here.

Consider moving. Many people who haven't saved much for retirement can squeeze some income out of their home equity either by selling the old homestead or taking out a reverse mortgage.

Since you don't own your home, however, you can save by moving to cheaper digs in your area or to an area where the cost of living is lower.

Lowering your monthly housing nut increases the amount you can save until you retire, and reduces the amount of money withdrawn in retirement.

You can get a sense of how living costs vary in different areas by giving Home Fair's Salary Calculator a spin. Also, check out Money's list of Best Places to Retire and Best Places to Live, which includes a tool for comparing various cities.

Think outside the box. Play the angles in your favor. Want to take a trip? Do it in the off-season when prices are lower. Or swap houses with someone who lives where you want to travel. Or offer to house-sit.

Need to replace a car? Buy when car-company sales are stagnant and choose models car companies are eager to push off the lots.

Ditto for clothing. Buy summer clothes at the end of the season when retailers are clearing the racks.

Time is an asset you have more of when you're retired. If you use it to your advantage, you often can exchange a bit of time for lower prices. And every dollar you save means more money sitting in your retirement accounts compounding away.

So stop obsessing about lost opportunities. Take advantage of those you still have. The sooner you start, the better your retirement will be.

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