I Asked ChatGPT To Come Up With the Best 401(k) Plan for My 50s — Here’s What It Said
Written by
Laura Beck
Edited by
Molly Sullivan
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Your 50s are when retirement planning gets real. You can finally see the finish line, but you’re also running out of time to fix mistakes. I asked ChatGPT to lay out the best 401(k) strategy for someone in their 50s who wants to retire comfortably.
The answer was surprisingly actionable and focused on maximizing the advantages you get in this specific decade.
Max Out Contributions, Especially the Catch-Up
ChatGPT started with the most important move: Contribute as much as possible, including catch-up contributions.
Once you turn 50, the IRS lets you add extra money to your 401(k). For 2025, the regular contribution limit is about $23,000. Add the catch-up contribution of $7,500 and you can put away $30,500 total per year.
If you can’t hit the maximum, ChatGPT recommended aiming for at least 15% to 20% of your income. Or increase your contribution by 1% every six months until you get there.
ChatGPT explained that every extra dollar you invest in your 50s compounds quickly because you likely have higher income now and fewer years before withdrawal. Contributions made during this decade often end up being 30% to 40% of your total nest egg.
Shift To a More Balanced Portfolio
Your 50s are not the time to be 100% in stocks. But you shouldn’t go too conservative either.
ChatGPT recommended a balanced allocation of 60% to 70% stocks and 30% to 40% bonds or stable value funds. Within stocks, aim for 40% to 50% U.S. large cap, 10% to 20% international and 5% to 10% small or mid-cap stocks.
The reasoning made sense. You still need growth to beat inflation over the next 20 or 30 years. But a major market crash right before you retire can be devastating if you’re too heavily invested in stocks. The balanced approach gives you growth potential while protecting against catastrophic losses.
Consider a Target-Date Fund for Simplicity
If managing a portfolio feels overwhelming, ChatGPT suggested using a target-date fund set for 2035 or 2040 depending on when you plan to retire.
These funds automatically adjust your allocation. You get more stocks now while you can handle volatility, then more stability as you approach retirement. The fund rebalances itself without you having to do anything.
For people in their 50s who don’t want to actively manage investments, this is often the smartest option.
Add Roth 401(k) Contributions for Tax Flexibility
ChatGPT was clear on the importance of tax diversification in your 50s. If your employer offers a Roth 401(k) option, use it.
The recommended split was 70% traditional 401(k) and 30% Roth 401(k). The traditional portion gives you a tax break now. The Roth portion gives you tax-free withdrawals later.
This strategy helps manage required minimum distributions in your 70s and gives you more control over your tax situation in retirement. If you plan to move states or expect to be in a similar tax bracket in retirement, the Roth option becomes even more valuable.
Rebalance Once a Year
ChatGPT recommended rebalancing your portfolio once per year, no more and no less.
Markets drift. Stocks might grow from 60% of your portfolio to 75% in a good year. Rebalancing means selling what has grown too big and buying what has fallen below target.
This forces you to buy low and sell high automatically without trying to time the market. It’s disciplined investing that works.
Never Touch Your 401(k) Before Retirement
At 50 and older, taking 401(k) loans or hardship withdrawals is especially costly. You lose tax-advantaged compounding time at the exact moment when it matters most.
ChatGPT’s rule was simple: Treat your 401(k) as untouchable until you’re 59 1/2. Money you pull out now can dramatically shrink your retirement income later.
Watch Your Fees
High fees quietly rob huge amounts from retirement accounts. ChatGPT recommended checking your 401(k) portal and looking for expense ratios under 0.20%. Avoid funds over 0.70% unless there’s a strong reason.
Index funds are usually the best choice. S&P 500 index funds, total market funds and international index funds all offer broad diversification at low costs.
Plan For Required Minimum Distributions Now
Your 50s are when you should start thinking about required minimum distributions that kick in at age 73. Having both traditional and Roth accounts gives you flexibility to manage taxes later.
ChatGPT pointed out that planning now for RMDs, Social Security timing and state taxes can save thousands down the road.
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