7 Best Ways to Save for Retirement in Your 50s

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Wondering about the best way to save for retirement in your 50s? Don’t worry if you’ve gotten a slow start saving or haven’t even started yet. We’ve got a multi-faceted approach that will put you on the right path.

How to Save for Retirement in Your 50s

If you’re just starting to save for retirement in your 50s, you might be feeling guilty because you know you should have been doing it all along.

But money expert Clark Howard says that emotion is completely counterproductive at this stage of the game. You still have a chance to get a solid retirement plan in place. Don’t ruin it by beating yourself up.

“The most important message I try to give people in their 50s is ‘no guilt trip,'” Clark says. “Whatever you’ve been able to do, whatever you’ve done, that’s what you’ve been able to do up to this point. From here, it’s all about where you are now and how you’re going to move forward.”

In this article, we’ll share seven of the best ways to save for retirement in your 50s.

Table of Contents

1. Participate in Your Employer’s Retirement Plan

Few of us have a pension anymore. That means the burden of saving for retirement is strictly on your shoulders. Fortunately, many employers make it easy by offering a retirement plan that you can contribute to automatically each pay period.

For most of us, that means a 401(k) plan at work. Some of us may have access to a Roth 401(k) at work, too.

Traditional 401(k) contributions are pre-tax and lower your taxable income today. You pay tax on the money you save when you withdraw it in retirement.

By contrast, Roth 401(k) contributions are post-tax. They don’t lower your taxable income today but the money you contribute today won’t be taxed again in retirement.

As a rule of thumb, Clark says that anyone in a 24% tax bracket or below should go with the Roth 401(k). If you’re a high-income earner, you’re likely better off with the traditional 401(k) to help lower your tax bill.

We’ve got a complete explanation of how the 401(k) and the Roth 401(k) work here.


2. Target Date Funds Make Investing Easy

If you’ve never invested before, you may be confused about where to invest your money. Target date funds offer an easy answer. There are funds available in five-year increments, so you can pick a fund that targets a year close to your planned retirement date.

So if retirement is, say, two decades away for you, then you would just select a target date fund for 20 years in the future. Then the money you put in is automatically adjusted between stocks and bonds as you age. The goal is to deliver growth but with an eye toward capital preservation as you near retirement.

Clark is a big fan of target date retirement funds, which he says are the “the best and easiest investment choice” for most people. We’ve got a full explanation of how they work here.

3. Do a Roth IRA Outside of Work

In addition to your investments through your employer’s plan, you’ll also want to do some investing outside of work. That’s where a Roth IRA comes into play.

“A Roth IRA is the most efficient place for you to have money grow for your retirement because the money in it grows tax-free and is spent tax-free,” Clark says.

The money expert likes discount investment houses like the Vanguard Group, Fidelity Investments and Charles Schwab as places for you to open your Roth IRA. However, there are income limitations.

We’ve got a list of eligibility requirements and step-by-step instructions on how to open a Roth IRA here.

4. Make Catch-Up Contributions to Retirement Accounts

One of the nice things about hitting 50 is that when you reach that milestone, you get access to a special club that younger people can’t get into.

No, we’re not talking about AARP: We’re talking about being allowed to make catch-up contributions to all your retirement accounts, per IRS rules!

  • Got a 401(k), 403(b), most 457 plans or the federal government’s Thrift Savings Plan? You can make an extra $6,500 contribution annually on top of the usual limit once you hit 50.
  • For those with IRAs, you can contribute an additional $1,000 per year after 50.

5. Consider a Side Job 

The average monthly Social Security benefit for a retired worker is $1,514, according to the Social Security Administration. But what you get from Social Security has everything to do with your 35 highest-earning years.


Boosting your current income will help pump up your future Social Security benefit. So, you might consider negotiating a raise or taking on a second job.

If you’re looking for more ways to make extra money, check out our Work from Home Guide. None of the sites listed on the guide will make you rich, but they will help you supplement your existing income.

6. Work With a Fee-Only Financial Planner

If you’ve built up substantial assets, there’s no substitute for the human touch in portfolio planning. Fee-only financial planners are Clark’s preferred way for you to get tailored advice on the best way to save for retirement in your 50s.

Fee-only financial planners earn their income on an hourly or ongoing basis, not on commissions from the investments they steer you towards. So, there’s no conflict of interest in the advice they’re giving you.

Visit NAPFA.org (The National Association for Personal Financial Advisors) for ongoing fee-only help planning for retirement or GarrettPlanningNetwork.com for one-time advice on an hourly basis.

7. Strive to Reduce Debt in Your Life

Being debt free buys you so much freedom. The best way to get out of debt and stay out of debt is to get on a budget. We’ve got guidance on how to do that using the C.L.A.R.K. Method — along with free budgeting worksheets — here.

Your second avenue to becoming debt-free is to take advantage of today’s cheap interest rates. If you’re still paying high interest rates on credit cards, get a lower interest card if you can qualify and transfer the balance. Then, don’t use the card again until you get that debt paid off!

Look at that box on your monthly statement and see what you’d have to pay to be debt-free in three years. Then resolve to pay that each and every month. You need to budget money to pay down your debt just as you would budget for rent or a mortgage or a car payment.

Speaking of mortgages, it’s time to start thinking about sunsetting your mortgage as you move through your 50s. Setting up your own accelerated biweekly mortgage payment plan for free is a great way to get the job done.

Final Thought

Identifying the best way to save for retirement in your 50s comes down to figuring out which way or combination of ways will work in your life.


But the bottom line is this — you definitely do want to make some effort at saving for retirement. Nobody wants to spend their golden years working in a job they don’t enjoy.

“In the end, saving money is a choice; there’s no requirement that you do it. And if saving is not something that’s important to you, it simply means you’ll probably have to work longer,” Clark says.

Do you have more investing questions? Contact Clark’s free Consumer Action Center.

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