Catching Up on Retirement Savings in Your 50s
Reaching your 50s without adequate retirement savings can be scary. The natural question is – is it too late to catch up? The good news is that while you may have to work harder than someone who started younger, there are absolutely steps you can take in your 50s to ramp up savings and set yourself up for a comfortable retirement.

  • First, take stock of where you stand today. Calculate your current retirement savings balance and use a retirement calculator to estimate how much income that could provide in your later years. Be realistic about your life expectancy and projected living expenses. This will show how big the gap is between your needs and your current savings.
  • Next, brainstorm ways to dedicate more money toward retirement savings now. Can you cut back discretionary spending to free up several hundred dollars a month? Downsize your home to reduce housing costs? Pick up a side gig for extra income? Look for big and small changes to generate more savings. 
  • Maximize your 401(k) contributions going forward. Take advantage of catch up contributions – in your 50s you can contribute $26,000 annually plus an extra $6,500. Automate increasing your savings rate 1% every 6 months until you reach the cap. 

  • Shift toward more aggressive investments like stocks to allow your money maximum potential to grow. You want to take somewhat higher risks to stimulate compounded returns. But balance this with some safer fixed income investments too as you near retirement.
  • Look into a health savings account (HSA) if you have a high deductible health plan. HSAs offer triple tax advantages and funds can be invested and used for healthcare costs in retirement. Open one and contribute up to the annual limit.
  • Pay down high interest debts like credit cards to eliminate that monthly burden and interest cost. Then redirect those funds straight into savings. Debt repayment is part of the catch up strategy. 
  • Delay collecting Social Security until age 70 if possible. For each year past your full retirement age that you delay, your benefit amount increases 8%. This can tremendously boost retirement income. 
  • Consider relocating to reduce living expenses. Move to a tax-friendly state or more affordable area. Or relocate abroad where your savings will stretch further. This could make your retirement savings last longer.

The key is having a sense of urgency. View your 50s as the critical window to ramp up contributions and leverage tools to accumulate as much as possible. With diligence and commitment, you can still retire with financial security.