It’s never too late to start saving for your retirement. While it’s best to start saving early, if you start at age 50, a “power decade” can help you get closer to your retirement savings goal.
Your 50s and 60s can be very impactful years as you may be earning more than you earned in your earlier working years, and you can start making catch-up contributions. Here’s what you have to do.
Why your 50s can still be a powerful window to catch up
In your 50s, you may have a higher income than you had in previous years and possibly – depending on your situation – fewer expenses. For example, grown children may not be at home. That means it’s time to use your savings skills.
The IRS sets contribution limits for retirement savings accounts such as a 401(k) but investors age 50 and older can contribute more. In 2026, they can contribute $8,000 more than the usual limit of $24,500, for a total contribution of $32,500. Note that for people age 60-63, the catch-up contribution limit in 2026 is $11,250, resulting in a $35,750 total contribution limit.
There are also withholding contributions for individual retirement accounts (IRAs). In 2026, the contribution limit for these accounts is $7,500 per year, and the catch-up contribution for people age 50 and older is $1,100. That’s up to $8,600 a year combined.
What to do in the first year of your savings plan
You don’t have to go from zero savings to a perfect retirement portfolio by the end of the year. The most important thing to do during these first 12 months is to take stock of your current finances and take action.
Start by calculating your savings in all of your 401(k), IRAs, health savings accounts (HSAs), tax-deductible brokerage accounts and any other bank or investment account. Then review your monthly expenses and look for ways to save money. Eliminating unused subscriptions and reducing the amount you consume can help, but cutting back on housing and transportation will likely save you more.
If you’re contributing to retirement plans, be sure to prioritize putting enough money into a 401(k) or similar account to get the employer match first, if any, since that’s free money. After that, you can increase savings in that account and others up to the IRS limit, if the account has one. You can use a compound interest calculator to assess how your portfolio can grow over time, with time frames for the next 10, 15 and 20 years. Those calculations can help you understand where you are now, and how much you should save during this energy decade.
Consider your Social Security strategy
It’s smart to focus on increasing your contribution limits during the energy decade, but there are a few other important moves you can make. The longer you delay tapping Social Security, even if it’s just a few years, the bigger your benefit check will be. That will give your nest egg more time to grow.
People born in 1960 or later reach the full retirement age of 67. It usually makes sense to delay Social Security until at least that time. But if you delay until age 70, you can increase how much benefit you just received.
Working a few more years can mean a delay in Social Security again contributing more to your savings accounts.
