Here is what readers should know about starting retirement savings at 50? here are 6 tips for catching up, in plain language. The wider context, the practical takeaway, and the parts that matter most for everyday decisions.
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| Plan | 2025 Contribution Limit | 2025 Catch-Up Limit |
|---|---|---|
| Individual Retirement Account (IRA; Traditional or Roth) | $7,000 | $1,000* |
| 401(k), 403(b), 457, Thrift Savings Account | $23,500 | $7,500** |
| Health Savings Accounts | $4,350 (individual) $8,550 (family) | $1,000*** |
If you’re 50 or older, you receive not only the regular contribution limit applicable to everyone but also the catch-up limit, as presented in the third column of the table. In other words, you can contribute $8,000 to an IRA rather than $7,000, and $31,000 (or $34,750 if you are between 60 and 63) to a 401(k) rather than $23,500. These extra allowances can make a massive difference over time.
Tip 2: Prioritize Employer-Sponsored Plans First
To have a shot at being able to retire with a reasonable income, you’ll want to focus on contributing as much as possible. Ideally, you’d max out employer-sponsored plan contributions, which often provide matching funds from your employer, while also adding as much as possible to a separate IRA and potentially a HSA for medical expenses.
Of course, that’s easier said than done. For most people, putting aside about $40,000 a year for retirement isn’t easy. Financial advisors offer tips on finding ways to make extra money and cutting nonessential expenses and high-interest debt without overextending yourself, which could lead to the need for early withdrawals later on.
Tip 3: Invest Wisely—Avoid Being Too Aggressive or Too Conservative
How you invest your money is equally important. Starting at 50 doesn’t mean you should choose overly aggressive and speculative investments. You’ll want to invest sensibly, which could mean waiting a bit longer to retire if you’re struggling to hit targets.
Tip 4: Factor in Inflation and Healthcare Costs
Remember to consider inflation when estimating how much you’ll need to live on. Today’s money will be worth less when you retire, so your savings targets should account for this reality.
Healthcare costs deserve special attention since they tend to rocket during retirement. Budget for these additional expenses and consider the pros and cons of opening an HSA or purchasing relevant insurance policies to help cover future medical bills.
Tip 5: Delay Claiming Social Security Benefits
Unless absolutely necessary, you should try to avoid claiming Social Security benefits when they become available at 62. The longer you can hold off before reaching 70, the higher your monthly payments will be. This strategy can significantly boost your retirement income, which is especially important if you’re starting to save later in life.
Tip 6: Understand the Tax Rules for Your Specific Accounts
Different retirement accounts have their own tax rules. Traditional IRAs and 401(k)s offer tax deductions now but are taxed in retirement, while Roth accounts are funded with after-tax dollars but offer tax-free withdrawals.
If you don’t understand these distinctions, you may end up making costly mistakes that further delay you from having the savings you need.
The Bottom Line
It’s better late than never. Maximize your contributions, leverage catch-up provisions, and invest wisely, and you still have a shot at retiring comfortably at a reasonable age, even if you only start at 50.
