By the time you reach your 50s, it is recommended to save around six times your annual salary. This target is achievable if you have been saving consistently throughout your career. However, many people may fall short of this goal due to career breaks, slower-than-expected investment growth, personal responsibilities, or even health challenges. Alternatively, you may simply want to go beyond the standard benchmarks to ensure greater financial security in your golden years.
Whatever your situation, if you are looking to boost your retirement savings in your 50s, this article can walk you through some steps to catch up. You may also want to consider consulting a financial advisor for help on creating the best retirement plan at age 50, tailored to your goals.
Below are 6 ways you can increase your savings for retirement:
1. Make use of the catch-up contributions offered by retirement plans
Thanks to catch-up contributions offered by several tax-advantaged plans, your 50s are an ideal time to boost your retirement savings. Once you turn 50, retirement accounts allow you to contribute more through catch-up contributions. The best part is that these higher limits apply to a variety of retirement plans, which gives you multiple ways to grow your nest egg.
Let’s start with workplace retirement plans like 401(k)s. This can be the best retirement plan at age 50. In 2025, the standard contribution limit for a 401(k) is capped at $23,500. But once you are over 50, you can contribute an additional $7,500 if you are between the ages of 50 and 59. If you continue to contribute to your 401(k) in your 60s, you can invest even more. Between the ages of 60 and 63, the catch-up limit is capped at $11,250. So, you could potentially contribute up to $34,750 a year to your employer-sponsored plan and boost your retirement savings during the final phase of your career. If you work in a small business and have a Savings Incentive Match Plan for Employees (SIMPLE) Individual Retirement Account (IRA), the regular contribution limit is $16,500 in 2025. With the catch-up contribution of $3,500 available to those 50 and older, your total limit climbs to $20,000 per annum. You should also look at your IRAs - both traditional and Roth. The standard contribution limit here is $7,000, but once you are 50 or older, you can contribute an extra $1,000, making your total possible contribution $8,000 each year. If you have a 401(k) and an IRA, you can potentially contribute up to $8,500 more annually, which can help you cover any savings gaps in your plan to a considerable extent by the time you retire.
Increasing your contributions also has a nice side effect – higher employer matches. If you are investing more into your workplace plan, such as a 401(k), you are likely unlocking higher employer contributions, too. Many employers match a share of your 401(k) contributions, so raising your own input can bring in a higher match.
If you are unsure about how to allocate these extra contributions or need help balancing multiple accounts together, a financial advisor can help you create a custom strategy that matches your retirement goals to all your savings plans. It is also important to note that some plans, like IRAs have income eligibility criteria. You can consult a financial advisor to understand how these affect you and invest accordingly.
2. Minimize high-interest debt as you step into your 50s
In your 50s, taking control of your debt and working toward getting rid of it is more important than ever. The sooner you eliminate high-interest debt, like credit card dues, the sooner you can free up some money and energy and use these to build your retirement nest egg.
The first benefit of paying off high-interest debt is the immediate impact on your cash flow. Every dollar you are no longer spending on interest payments can be put toward your retirement accounts, emergency savings, or even stock investments. This can help you catch up on your savings before retirement. Secondly, carrying debt into retirement is never a good idea, and most experts advise against it. Once you stop earning a regular income, it becomes much harder to keep up with debt payments. High-interest debt can finish your fixed income quickly. Therefore, clearing it in your 50s is essential if you want to give yourself the freedom to retire without the worry of monthly liabilities and limited cash flow.
There are several effective strategies to start tackling your debt. You can start by paying smaller balances, like credit card dues. It is also important to avoid taking on fresh debt so close to retirement. Debt consolidation can be another good strategy if you are dealing with multiple high-interest loans. This can combine all your loans into a single payment, ideally with a lower interest rate, and help you manage your payments more effectively. You can also benefit from working with a financial advisor and get help in creating a personalized debt payoff plan.
3. Focus on tax optimization
As you approach retirement, optimizing your portfolio for taxes can make a difference in how long your savings last. This can be done by investing in more tax-efficient plans. It is important to diversify your investments across different retirement plan options with varying tax treatments. A well-balanced mix of tax-deferred, tax-free, and taxable assets can balance out your tax liabilities in retirement. For example, moving some of your savings into a Roth IRA can be a smart step. Since Roth contributions are made with after-tax money, all your qualified withdrawals after age 59½ are entirely tax-free, provided the account is at least five years old. So, you can pull money out during retirement without triggering a tax bill. This can be an advantage if you expect to be in a higher tax bracket later in life.
Additionally, Roth IRAs do not have Required Minimum Distributions (RMDs) for account owners, unlike traditional IRAs or 401(k)s. This gives you more control over your withdrawals and allows you to plan your distributions as you see fit instead of following a rigid schedule that is imposed on you. This reduces your taxable income in retirement. If most of your savings are currently in tax-deferred accounts like a traditional IRA or 401(k), you may consider a Roth conversion. While converting requires paying taxes in the year of conversion, the long-term benefits of tax-free withdrawals can be helpful in preserving your retirement income.
You can also consider investing in Health Savings Accounts (HSAs) for tax optimization. HSAs offer a three-way tax advantage where your contributions are tax-deductible, your investments earn profits that are tax-free, and withdrawals for qualified medical expenses are also tax-free. If you are enrolled in a High-Deductible Health Plan (HDHP), you qualify to open an HSA. HSAs particularly stand out as they allow you to save in a tax-efficient way, and at the same time, prepare for healthcare costs in retirement, which are likely to be one of your largest expenses as you grow older.
4. Do not eliminate stocks from your retirement portfolio
While you may want to add more capital-preserving assets to your portfolio in your 50s, it is important to keep a balance and not remove all risk from your investments. Conservative assets like bonds or money market accounts can offer financial stability, but eliminating equities entirely from your portfolio could leave you exposed to another risk - inflation.
Stocks are one of the few asset classes that have historically outpaced inflation over the long term. Allocating a portion of your savings to equities helps ensure that your money continues to grow and retains its purchasing power in the future. Many people today choose to work well into their 60s and even 70s. If you are one of them, you likely have several working years ahead of you. That gives your investments more time to recover from any market fluctuations and benefit from long-term compounding. Even if you plan to retire in your early 60s, having some stock exposure can still work in your favor. It provides the potential for your portfolio to keep growing, which can help your savings last longer. If you are concerned about risk, you may consider gradually shifting your allocation from stocks to bonds. For example, you can reduce your equity exposure by slowly selling your high-risk stocks over time while increasing your allocation to bonds. You also move to dividend-paying stocks before you move to bonds entirely.
No matter the allocation you choose, make sure to stay invested in stocks at least partially. This is essential for your long-term financial health. A diversified portfolio that includes a mix of equities and debt investments can give you stability along with growth and make your portfolio inflation-resilient. A financial advisor can help you select stocks that can offer inflation protection while ensuring that the portfolio’s overall risk is aligned with your preferences.
5. Consider downsizing to save money
Downsizing your assets in your 50s can help you further boost your savings. At this stage in life, many people find themselves with fewer financial obligations. For instance, if you purchased your home in your 30s, chances are your mortgage payments are either about to end or already paid off. Even if you are still making these payments, moving to a smaller or more affordable home could allow you to clear that debt entirely and reduce your ongoing housing expenses.
Your children may also now be financially independent, or at least well on their way to getting jobs. That can significantly free up your monthly budget. Moreover, with fewer people to support, you might not need a larger home or all the amenities you once did. Downsizing to a smaller home and selling off extra possessions can help you save money and simplify your lifestyle. You can consider getting rid of unused or unnecessary belongings, such as furniture, electronics, and more. Smaller homes require less maintenance and result in lower property taxes, all of which can help you save more.
The money you save from downsizing can be put into investments or even an emergency fund. Downsizing in your 50s will give you more control over your present and future financial health. It will also allow you to reduce so many of your current expenses while preparing for larger, potentially unavoidable costs down the road, like healthcare in your later years.
6. Consider hiring a financial advisor
If you find yourself behind on your retirement savings goals, your 50s are a critical time to take action and working with a financial advisor can help you do this properly. With retirement getting close, there is little room for mistakes, and a qualified financial advisor can offer the direction needed to make the most of your remaining working years. Hiring a professional allows you to assess your current position and map out a realistic plan for the future. An advisor can review your income, expenses, savings, and investments to help you create a streamlined plan.
Hiring a professional at this stage can help you understand which retirement plan is best for you. A financial advisor can recommend a mix of traditional and Roth IRAs, employer-sponsored plans like the 401(k), bonds, HSAs, or other investment tools based on your income and tax situation. They can also help you understand how to manage catch-up contributions and prepare for rising healthcare costs.
Moreover, financial advisors can help you evaluate all the ideas discussed in this article. They can offer personalized guidance to ensure that you actually implement the steps given above based on your unique situation. The earlier you consult with a professional, the more time you will have to put their advice into action.
To conclude
It is important to be more proactive in the years starting from 50 until you retire to ensure you have enough funds saved when you retire. However, while it is natural to feel ambitious about increasing your savings, it is equally important to maintain balance. You may not have the luxury to recover from large financial losses or high-risk decisions at this stage.
Working with a financial advisor can be one of the most effective steps you take. Their expertise can help you make smarter decisions tailored to your needs. In addition to professional guidance, you can also adopt strategies, such as contributing more through catch-up provisions, eliminating high-interest debt, downsizing to reduce expenses, and diversifying your portfolio to stay inflation-protected without taking on excessive risk. You might also explore options like delaying retirement, picking up part-time work, or pursuing side hustles to further strengthen your financial health.
Use the free advisor match tool to get matched with seasoned financial advisors who can help you increase your savings for retirement. Answer some simple questions about your financial needs and get matched with 2 to 3 advisors who can best fulfill your financial requirements.
For additional information on retirement planning strategies that can be tailored to your specific financial needs and goals, visit Dash Investments or email me directly at dash@dashinvestments.com.
About Dash Investments
Dash Investments is privately owned by Jonathan Dash and is an independent investment advisory firm, managing private client accounts for individuals and families across America. As a Registered Investment Advisor (RIA) firm with the SEC, they are fiduciaries who put clients’ interests ahead of everything else.
Dash Investments offers a full range of investment advisory and financial services, which are tailored to each client’s unique needs providing institutional-caliber money management services that are based upon a solid, proven research approach. Additionally, each client receives comprehensive financial planning to ensure they are moving toward their financial goals.
CEO & Chief Investment Officer Jonathan Dash has been profiled by The Wall Street Journal, Barron’s, and CNBC as a leader in the investment industry with a track record of creating value for his firm’s clients.