5 Ways to Optimize Your Retirement Savings in Your 50s

Today you need to go to work. This weekend you have to run a few loads of laundry. And next week you need $1 million in savings so that you can retire. Okay, maybe not literally, but that’s how close retirement can start to feel once you hit your 50s. Thankfully, your real-life to-do list probably isn’t that dire. 

With a decade (or more) of working years ahead, you still have time to maximize your retirement savings. Here are some expert suggestions on how to save for retirement as your years in the workforce wind down.

Up your retirement account contributions.

Zaneilia Harris, of Harris & Harris Wealth Management in the D.C. area and author of Finance ’n Stilettos, points out that once you turn 50, the IRS lets you put more pretax dollars into your retirement account with “catch-up contributions.” The exact dollar amounts will change annually, but here’s the breakdown for 2022: Those under 50 can put $20,500, pretax, into a 401(k), 403(b), 457, or TSP plan. Anyone 50 or older can make a catch-up contribution on top of that, up to $6,500, pretax.

Calibrate your expectations.

Having $1 million in savings is one broad-strokes retirement rule, but you may want more (or less) depending on where you want to live, whether you plan to travel, etc. To ensure you don’t hit retirement age with too little in the bank, you’ll want to calculate an estimate now if you haven’t already. For specific guidance, Stefanie O’Connell-Rodriguez, author of The Broke and Beautiful Life and founder of Statement, suggests “meeting with a certified financial planner or using an online retirement calculator to estimate how much you’ll need to save based on your projected expenses in retirement.”

Factor in real estate.

If your home is paid off, consider how costs of ownership (maintenance, taxes, etc.) versus renting stack up. “Selling your home sooner and becoming a renter might [free] up funds that you can invest in a more flexible and liquid retirement portfolio,” O’Connell-Rodriguez says. One real-estate note to keep in mind: If you’re planning to stay in your home, you don’t get to count its value as part of your retirement savings. 

Play it safer.

If the stock market crashes tomorrow, you don’t want your retirement savings to crash with it. “Consider shifting away from higher-risk investments to reduce your exposure to short-term volatility,” O’Connell-Rodriguez says. (Lower-risk investments will generally have lower returns, but they also tend to be more stable.) A target-date fund can help you do this automatically, she says, “by shifting your investment holdings for you based on how many years you have until retirement. It transitions you to a more conservative portfolio as your target retirement date gets closer.”

Take stock of your health benefits.

It’s safe to assume that your health will decline as you age—and you don’t want to get stuck draining your retirement savings (penalties be damned) to pay medical bills. “Review your health benefits and improve your plan as needed,” says Bola Sokunbi, author of the Clever Girl Finance books. She points out that life insurance can offer security—just make sure you understand the type of policy you’re buying. She prefers term-life insurance over whole-life insurance, though the latter can offer tax benefits for high-net-worth individuals. A certified financial planner can help you weigh your options.

More tips on minding your retirement savings at every age:

  • How to Save for Retirement When You’re Just Starting Out
  • 4 Ways to Keep Your Retirement Savings on Track in Your 30s
  • 5 Ways to Take Control of Your Retirement Savings In Your 40s


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