How to Plan for Retirement in Your 50s: Key Steps to Take Now

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Reaching your 50s is a pivotal moment when retirement planning becomes more than just a thought — it becomes a priority.

Whether you’re catching up or fine-tuning your savings strategy, understanding how to plan for retirement in your 50s is essential to retiring comfortably. The good news? It’s not too late to take meaningful steps that can strengthen your financial future.

Assessing Your Current Financial Situation

Before making big decisions, take a financial inventory to see where you stand.

1. Track Your Income and Expenses

Start by reviewing how much money comes in — and more importantly, where it goes. Use a budgeting app or spreadsheet to record your income and spending over a few months. Look for patterns and cut expenses that aren’t aligned with your goals.

2. Review Your Assets and Debts

List everything you own (checking, savings, 401(k), IRAs, real estate) and everything you owe (mortgage, credit cards, loans). This full picture helps you set realistic targets.

3. Calculate Your Net Worth

Subtract your total liabilities from your total assets. That number — your net worth — shows your current financial health and whether you’re on track for retirement.

Setting Retirement Goals

Now that you know where you are, decide where you want to go.

1. Choose Your Retirement Age

Do you want to retire at 62, 67 or 70? Remember, retiring early gives you more free time but means covering expenses for more years.

2. Estimate How Much You’ll Need

A common benchmark is about 75% of your pre-retirement income. For example, if you earn $80,000 now, aim for about $60,000 per year in retirement income.

3. Visualize Your Retirement Lifestyle

Do you want to travel, downsize or move to a state with no income tax, like Florida or Texas? Your lifestyle will shape your financial needs.

Maximize Your Retirement Savings

As many as 40% of American workers report feeling behind on their retirement planning and saving. You may feel behind, but you have tools on your side.

1. Max Out Contributions

In 2025, you can contribute up to:

• $23,500 to a 401(k)
• $7,000 to an IRA

2. Use Catch-Up Contributions

Only 36% of Americans in their 50s have saved more than $250,000 for retirement — far below the amount most financial planners recommend. If you’re 50 or older, you qualify for even more:

• Additional $7,500 for 401(k)s (total = $31,000)
• Additional $1,000 for IRAs (total = $8,000)

These extra savings can make a big impact.

3. Explore Other Savings Options

• Health Savings Accounts (HSAs): Triple tax benefits if you have a high-deductible plan
• Brokerage Accounts: No tax breaks, but high flexibility and no contribution limits

Understanding Social Security and Pension Plans

Social Security and pensions could be a critical part of your income.

1. When to Claim Social Security

You can start benefits at 62, but they’ll be reduced. Wait until your full retirement age (66 to 67) for full benefits. Delay to 70, and your benefit grows by about 8% each year you wait.

2. Know Your Pension Details

If you’re lucky enough to have a pension, learn its rules now. Review:

• Your expected monthly benefit
• Vesting schedule
• Claiming timeline

3. Consider the Trade-Offs

Early claiming gives you more years of smaller checks. Waiting gives you fewer years, but bigger checks and higher survivor benefits for your spouse.

Reducing Debt Before Retirement

Paying off debt is like giving yourself a raise in retirement.

1. Eliminate High-Interest Debt

Focus first on credit cards and personal loans. Interest over 15% can quickly wipe out your retirement earnings.

2. Consider Paying Off Your Mortgage

It’s not required, but being mortgage-free can reduce your stress and expenses significantly. If it’s financially feasible, it’s worth exploring.

3. Avoid New Debt

As retirement nears, try not to take on new loans unless necessary. Keep your budget lean and predictable.

Investment Strategies for Your 50s

Shift your investment strategy to reduce risk — but not eliminate growth.

1. Stay in the Market — but Carefully

A 50-year-old today has a 50% chance of living past 85, meaning retirement could easily last 30+ years. You may live 30+ years in retirement, so you still need growth. Just adjust your asset mix to reflect your risk tolerance.

2. Diversify Your Portfolio

Use a mix of:

• Stocks for growth
• Bonds for stability
• Real estate or alternatives for income and protection

3. Rebalance Regularly

Markets shift. Revisit your portfolio once or twice a year to ensure your investments stay aligned with your goals. Rebalancing your portfolio helps maintain proper risk levels as you near retirement.

Creating a Retirement Withdrawal Strategy

A withdrawal plan is just as important as a savings plan.

1. Use the 4% Rule as a Starting Point

The general rule is to withdraw 4% of your portfolio in year one of retirement, adjusting for inflation each year after. This is designed to last 30 years, but customize it based on your needs.

2. Prioritize Account Order

Consider withdrawing from:

1. Taxable brokerage accounts
2. Tax-deferred accounts (401(k), IRA)
3. Tax-free Roth accounts

This strategy helps reduce taxes and grow your savings longer.

Final Take to GO: Key Steps to Take Now

Planning for retirement in your 50s can feel overwhelming, but it doesn’t have to be. With tools like catch-up contributions, diversified investments and smart debt strategies, you can still build a strong financial foundation.

Next Step:

• Use a retirement calculator
• Talk to a financial advisor
• Start tracking your progress today

If you’re wondering how to plan for retirement in your 50s, start with these actions:

• Assess your financial picture and set realistic goals
• Max out retirement contributions — including catch-up contributions
• Understand your Social Security and pension options
• Tackle high-interest debt
• Adjust your investment strategy to reflect your timeline
• Create a withdrawal plan to stretch your savings

You don’t need to have everything figured out today, but every step you take now will give you more freedom tomorrow.

Data is accurate as of July 10, 2025, and is subject to change.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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