5 Ways to Catch Up on Your Savings in Your 50s

5 Ways to Catch Up on Your Savings in Your 50s

January 23, 2024

People who begin saving money for retirement early in their careers benefit from compound interest, which “grows” their money over time. That is the ideal scenario, but plenty of people in their 50s find themselves falling short in retirement savings for many reasons.

A recent BankRate study found that more than half of American adults in the workforce (56 percent) said they were behind where they should be when it comes to saving for their retirement. Of those, 37 percent reported feeling “significantly behind.”

If you want to increase your retirement savings, we recommend that you meet with your financial advisor so they can guide you to an appropriate strategy based on your unique situation and goals.

Boosting your savings often requires a multifaceted approach. Here are five ways to catch up on your retirement savings.

1. Max out the contributions in all your retirement accounts

One simple way to boost your retirement savings is to contribute the maximum amount you are allowed to contribute to your IRA and/or 401(k) every year. If you have an employer-sponsored retirement plan, be sure you take full advantage of any matching 401(k) benefit your employer offers. Think of this as free money that compounds tax-free until you withdraw it.

2. Take advantage of federal “catch-up” provisions

Recognizing that many people in their 50s need to catch up on savings before retiring, the federal tax code allows them to contribute more than people in other age groups in making tax-advantaged contributions to individual retirement accounts (IRAs), 401(k) plans and health savings accounts (HSAs) (starting at age 55).

IRA catch-up contributions (as well as regular contributions) are due by the due date of your tax return (not including extensions).

On Nov. 1, 2023, the IRS announced that the contribution limit for employees who participate in 401(k), 403(b) and most 457 plans, as well as the federal government's Thrift Savings Plan, increased to $23,000, up from $22,500 in 2023. The limit on annual contributions to an IRA increased to $7,000, up from $6,500. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment and remains $1,000 for 2024.

The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b) and most 457 plans, as well as the federal government's Thrift Savings Plan, remains $7,500 for 2024. Therefore, participants in 401(k), 403(b) and most 457 plans, as well as the federal government's Thrift Savings Plan who are 50 and older, can contribute up to $30,500 starting in 2024. The catch-up contribution limit for employees 50 and over who participate in SIMPLE plans remains $3,500 for 2024.

Taking advantage of catch-up contributions can make a significant difference in your retirement savings. For example, if you turn 50 this year and put an extra $1,000 into your IRA at the beginning of each year for the next 20 years, and that money earns an average return of 7 percent a year, you could have almost $44,000 more in your account than someone who didn't take advantage of the catch-up provision. The impact can be even greater for a 401(k) or similar plan, whose catch-up contribution opportunity is even larger.

This is a hypothetical illustration and is not intended to reflect the actual performance of any particular security.

3. Set and follow a budget

If you’ve never set and followed a budget before, it’s a great time to start. Work with your financial advisor to determine how much you can save each month toward retirement, given your current circumstances. You don’t want to save so much that it prevents you from meeting your daily expenses or keeps you from enjoying your life right now. But setting and following a budget can give you the discipline you might need to set aside a specific amount of money for retirement each month.

The first step in setting a budget is to track your spending for a month. Keep track of every purchase you make. You can save and then categorize your receipts, or you can put all your expenses on a card and then tally up the expenditures by category by reviewing your statement.

Many people are surprised when they track where their money is going. They aren’t aware that they’re spending so much in certain areas. After going through the numbers, look for areas where you can cut spending. For example, if you eat out five days a week, cut that back to two and make more meals at home.

4. Pay off debt

Work with your advisor on a strategy for paying your debt down, or off. When you pay off debt, you are removing a fixed expense, which in turn will improve your cash flow over the long term. Be especially diligent about paying off high-interest debt.

5. See if you’re eligible for the Saver’s Credit

Another way to boost your retirement savings is through the Saver’s Credit, formerly called the Retirement Savings Contributions Credit. This is a nonrefundable tax credit worth up to $1,000 ($2,000 if married filing jointly) for mid- and low-income taxpayers who contribute to a retirement account. You are eligible for the Saver’s Credit if you are 18 or older, not a full-time student and cannot be claimed as a dependent on another person’s tax return.

You also must also make a retirement plan or IRA account contribution and fall under maximum adjusted gross income caps the IRS sets each year. If your adjusted gross income is above any of the following thresholds, you are not eligible for the credit:

2023 saver's credit limits (taxes filed in 2024):

  • Married filing jointly: $73,000
  • Head of household: $54,750
  • All other filing statuses: $36,500

2024 saver's credit limits (taxes filed in 2025):

  • Married filing jointly: $76,500
  • Head of household: $57,375
  • All other filing statuses: $38,250

If you qualify, this retirement savings tip could make a significant impact on your financial future.



The most pressing worry for retirees and those saving for retirement is the possibility they may outlive their assets. This is a worry for more than half of those surveyed in a Cerulli study. More than half of retirees — 54 percent — rely on Social Security as their primary source of income, and of those, 20 percent have no other source of income.

We want you to retire as comfortably as possible, with minimal worry about the future. If you are not where you need to be with your retirement savings, please contact us so we can guide you as you catch up.



Any opinions are those of the author and not necessarily those of Raymond James. This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or a loss regardless of strategy selected. No investment strategy can guarantee your objectives will be met. Past performance is no guarantee of future results. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.