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When you’re in your 50s, retirement may be right around the corner. Every year might feel like it flies by faster than the last, and whether you’re hoping to retire early, in your mid-60s, or never, it’s smart to consider different scenarios and how financially prepared you may be for them.
Many people in their 50s find themselves in excellent health and may be able to keep working and saving for years to come. Others might find themselves forced into early retirement due to health challenges, caretaking for an older relative, or getting laid off and being unable to get rehired in a satisfying role.
To prepare for a spectrum of possibilities, you may want to evaluate your current net worth and identify ways to bolster your retirement fund. If you’re not sure whether you’re on track for a financially comfortable retirement, you might compare your progress against some popular benchmarks.
These three steps may help you see where you stand and plan your next steps to meet your retirement goals.
- Learn about two common retirement savings guidelines.
- Consider whether they align with your needs.
- Make a plan to boost your savings rate or stay on track.
First, there are some broad guidelines with which to compare your own savings, remembering that general guidance doesn’t always exactly fit everybody’s own situation.
Retirement savings guidelines for your 50s
Do you think about saving for retirement as trying to reach a certain dollar amount, or trying to save a multiple of your income? Generally, financial professionals suggest the latter. Amounts based on multiples of your income assume that you will be able to live on a similar or slightly lower income in retirement. And income-based guidelines can be more helpful than absolute dollar figures, which don’t account for the standard of living you’re accustomed to or regional costs of living.
Most popular guidelines suggest saving about five to six times your salary by age 50 and about seven times your salary by age 55. The ultimate goal is to reach 10 to 11 times your salary by your mid-60s, according to these rules of thumb.
Suppose your annual income is $50,000. If you have saved $250,000 to $300,000 by age 50 and $350,000 by age 55, that’s an accomplishment to feel proud of.
But that doesn’t mean you should feel bad if you have saved less. Plenty of smart, hardworking people never achieve this level of savings in their lifetime, let alone in their 50s. The median Gen X household, born between 1965 to 1980, has roughly $100,000 saved for retirement, according to Federal Reserve data. Unfortunately, that’s only for those households that actually have retirement accounts. Four-in-10 don’t.
Do income-multiple guidelines fit your needs?
The benefit of trying to save a multiple of your income is that you aren’t aiming for a goal that may be out of line with your circumstances, like saving $2 million for retirement when you only earn $40,000 a year.
To accumulate that level of wealth, you would need to save $480 every two weeks, or about 28 percent of your income, for 35 years and earn an average annual return of 8 percent, which might be a challenge for many people. With increasing earnings, it might get easier over time. With increasing expenses, it might not.
What about saving seven times your income by your mid-50s? To make the math simple, let’s say you started earning the same $40,000 salary at age 20. By age 55, could you have saved $280,000? That goal might seem easy to achieve by comparison. You’d need to save $61 every two weeks, again assuming an 8 percent average annual return.
But instead of picking an arbitrary savings target, why not personalize your mission? Here’s where a financial professional may be helpful.
Connect with a MassMutual financial professional
“We believe retirement should be viewed with the end in mind, meaning how much do you currently spend? What does it take to run your lifestyle today?” said Carl B. Coolidge, managing partner of Jacobs, Coolidge & Company in St. Simons Island, Georgia. “So, if you currently spend X dollars per month and we properly inflate that number to and through retirement, then you get a much better sense of how much income you will need to retire and what are clearly needs vs. wants in retirement.”
Simply saving toward a certain dollar amount of assets, while a reasonable goal, may not tell you whether you can expect to end up with enough money for your personal situation. Generating a personalized target lets you know how much you really need to save each month.
That target, in turn, lets you know how much you may be able to spend each month during your working years and how much you might plan to live off of each month during retirement, while you may still have time to make adjustments. For some people, that might mean learning to get comfortable living on less. For others, it might mean loosening the reins a bit and feeling comfortable with spending money on a few extra trips or a nicer car.
Your Social Security benefit will also factor into how much you need to save on your own. Understanding when to claim can make a meaningful difference in your retirement income. (Learn more: How much Social Security will you get? The 4 big drivers)
How to boost your savings rate or stay on track
The advice for increasing your savings rate is basically the same at every age:
- Set up automatic contributions to retirement accounts and increase them each year if possible.
- Take advantage of any employer retirement savings match that’s available to you.
- Use catch-up contributions for which you qualify.
- Increase your income.
- Decrease your expenses.
What’s different? Workers in their 50s can benefit from more generous contribution limits to retirement accounts. In 2026 the maximum 401(k) plan contribution is $24,500.
But you may be able to save even more in this tax-deferred account. Those over age 50 can make catch-up contributions of $8,000 for 2026. Also, investors age 60 to 63 may make a bigger catch-up contribution of up to $11,250 per year, if allowed by their plan.
Individual retirement accounts allow for catch-up contributions as well. In 2026, the annual contribution limit is $7,500, but 50-somethings can save an extra $1,100 per year.
That can add up. If you saved and invested $7,500 a year for the next 10 years and earned an average annual return of 7 percent, you would end up with nearly $119,000. But if you saved $8,100 a year for the next 10 years, you would accumulate roughly $128,000.
Not everyone has access to a 401(k) or similar plan through work, and not everyone has the means to max out both the regular contribution limit and the catch-up limit. But it shows how rapidly you might amass retirement savings over the next 10 years if you do have the option.
One change to be aware of: Starting in 2026, if you're 50 or older and earned more than $150,000 in the prior year, your catch-up contributions to a 401(k) or 403(b) must be made on a Roth (after-tax) basis. (Learn more: High-earner 401(k) catch-up changes: What to know)
Conclusion
Once you’re in your 50s, retirement is no longer an abstraction: It’s a life stage you may be entering in the next 10, 15, or 20 years. Fortunately, that time frame still provides an opportunity to increase your savings rate or otherwise rethink your retirement strategy, perhaps with the help of a financial professional, if you don’t think you’re on pace to meet your goals.
Since 1851, MassMutual has been focused on helping people secure their future and protect the ones they love. That purpose is why we have thousands of financial professionals to assist you on your journey through insurance, investing, retirement planning, estate management, and more. You can find a MassMutual professional with this tool or you can let us know you’d like to talk to one and we’ll have one of our financial professionals contact you.
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Frequently Asked Questions about retirement savings in your 50s
Q. How much should I have saved for retirement by age 50?
A. A common guideline suggests having 5 to 6 times your annual salary saved by age 50, though your personal target may differ based on your expected retirement lifestyle and expenses. (Learn more: Your ultimate savings guide: Goals and strategies)
Q. How much should I have saved for retirement by age 55?
A. Many financial professionals recommend having about 7 times your annual salary saved by age 55, on the way to a goal of 10 to 11 times your salary by your mid-60s. A financial professional can help you personalize these benchmarks to your situation.
Q. How can I catch up on retirement savings in my 50s?
A. Start by maximizing contributions to tax-advantaged accounts, taking advantage of catch-up contributions, and capturing any employer match. Automating your contributions and increasing them annually can help you build momentum. (Learn more: 3 strategies to boost your retirement savings)
Discover more from MassMutual…
How to catch up on retirement savings at age 50 or older
What's your retirement plan for living longer?
No desire to retire? Here's how to plan
This article was originally published in November 2020. It has been updated.
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