If you are in midlife and worried about retirement, you have a lot of company. In the Federal Reserve’s 2025 Survey of Household Economics and Decisionmaking, published in May 2026, only 43% of non-retired adults aged 45 to 59 said their retirement savings were on track. Across all non-retirees, the figure was 35%.
Put the other way, most people in their 40s and 50s either think they are behind or are not sure. The good news is that these are often the highest-earning years of a career, and the tax code gives people over 50 extra room to save. Fifteen to twenty-five years is a long time for money to grow.
Key takeaways
- Your savings rate matters far more than finding a better investment.
- At 50, catch-up contributions let you put an extra $8,000 into a 401(k) and an extra $1,100 into an IRA in 2026.
- Ages 60 through 63 get an even larger 401(k) catch-up of $11,250.
- Stay meaningfully invested in stocks; you likely have decades of spending ahead, not just years of saving.
- Delaying Social Security can raise your monthly check substantially.
- Avoid high-risk bets to “make up for lost time.”
First, measure the gap
You cannot close a gap you have not measured. Start by adding up every retirement account, including old 401(k)s from past jobs, and note your current monthly contribution. Then estimate what you will need. A rough approach many planners use is to target replacing 70% to 80% of your pre-retirement income from all sources combined.
Next, get your projected Social Security benefit from your my Social Security account. That number is often larger than people expect, and it shrinks how much your savings must cover. A free online retirement calculator, or your 401(k) provider’s planning tool, can then show whether your current path gets you there.
If an old 401(k) is sitting with a former employer, consider consolidating it. Our 401(k) rollover guide covers the options and the mistakes that trigger taxes.
Use every dollar of 2026 contribution room
These are the IRS limits for 2026, per the agency’s announcement:
| Account | Under 50 | Age 50 and older | Ages 60 to 63 |
|---|---|---|---|
| 401(k), 403(b), most 457 plans, TSP | $24,500 | $32,500 | $35,750 |
| IRA (traditional or Roth) | $7,500 | $8,600 | $8,600 |
| HSA (self-only / family) | $4,400 / $8,750 | +$1,000 at 55+ | +$1,000 |
One change to know about: starting in 2026, workers whose prior-year wages from their employer exceed an IRS-set threshold generally must make 401(k) catch-up contributions as Roth (after-tax) contributions rather than pre-tax. Your plan administrator will apply the rule, but it may change your tax planning.
A married couple both over 50 and both with workplace plans could, in principle, shelter more than $80,000 a year between their 401(k)s and IRAs. Few households can save that much, but it shows how much room exists for anyone who can increase contributions.
Find the money to save
Higher contributions have to come from somewhere. Common sources in midlife:
- Raises. Direct at least half of every raise to retirement before it shows up in your spending.
- Finished obligations. When a car loan ends or a child leaves daycare, redirect that payment to savings the same month.
- Bonuses and one-time money. See our guide to investing a windfall.
- Paying for college. Helping kids is generous, but students can borrow for college and you cannot borrow for retirement. Fund your own retirement first.
A hypothetical example: a 47-year-old earning $90,000 who raises their 401(k) contribution from 6% to 15%, with a 4% match, would be saving about $17,100 a year. At an assumed 6% annual return, that grows to roughly $630,000 over the 20 years to age 67, before counting what is already saved. The return is an assumption, not a promise, but the effect of the higher savings rate is real.
Choosing a stock and bond mix
A frequent mistake among late starters is getting too conservative too early. At 50, you may need your money to last into your late 80s or 90s. That is potentially 40 years, and much of it can stay invested in stocks.
A target-date fund matched to your expected retirement year is a reasonable default. It holds a mix of US and international stocks and bonds and shifts gradually toward bonds as the date approaches. If you prefer to build your own, a common starting point in your 40s is somewhere around 70% to 85% stocks, easing toward 50% to 65% in your early 60s, adjusted for your comfort with losses.
The other mistake runs the opposite way: trying to catch up by chasing risky assets. Concentrated bets on single stocks, leveraged funds or crypto can set you back further at exactly the age when you have less time to recover. A plain, diversified portfolio with a higher savings rate is the more reliable path.
Other levers besides investing
Work a little longer
Working even two or three extra years does triple duty: more contributions, more growth and fewer years of withdrawals.
Delay Social Security
For people born in 1960 or later, full retirement age is 67. Claiming as early as 62 permanently reduces your benefit, while waiting past full retirement age raises it for each month you delay, up to age 70, according to the Social Security Administration. For a married couple, the higher earner’s decision also affects the survivor benefit.
Cut big fixed costs
Downsizing a home, dropping a second car or refinancing expensive debt can free up more money than trimming small expenses ever will.
It is not too late
Starting at 45 or 52 is not the same as starting at 25, and it is not supposed to be. You may need to save a larger share of income, work a bit longer or plan on a slightly leaner retirement. But midlife savers have advantages younger people lack: higher income, clearer goals and access to catch-up contributions. Increase your contribution rate this month, consolidate old accounts, choose a diversified fund and leave it alone. Steady progress over 15 or 20 years adds up to a great deal.
Frequently asked questions
When can I start making catch-up contributions?
You are eligible for the whole calendar year in which you turn 50, even if your birthday is in December. The same applies to the higher 60-to-63 catch-up in the year you turn 60.
Should I choose Roth or traditional contributions now?
If you are in a high bracket today and expect a lower one in retirement, traditional (pre-tax) contributions often make sense. A mix of both gives you flexibility to manage taxes later. Remember that some high earners’ catch-up contributions must be Roth starting in 2026.
Is it smart to pay off my mortgage before retiring?
Entering retirement without a mortgage lowers the income you need, which many people value. But draining retirement accounts to do it can create a large tax bill. Usually it is better to keep contributing and add extra principal payments with spare cash.
What if I am self-employed with no workplace plan?
A Solo 401(k) or SEP IRA can allow much larger contributions than an IRA alone. See our Solo 401(k) guide for how the limits work.
