Personal Finance

I'm in my 50s with only $150k saved for retirement — have I started too late?

Joey Frenette

Published: December 13, 2024 9:32 am

Falling behind in retirement is a reality for many Americans, especially those who’ve fallen on hard times in their careers. Undoubtedly, recessions, inflation, and pandemic-induced disruptions have heavily impacted many people’s savings. While many may have fallen behind on their retirement goals (or have a below-average sum for their age group), I still think it doesn’t make a whole lot of sense to keep comparing oneself to others or even the national averages. Why? Not only will it not help you, but comparisons may discourage you from getting your retirement on track.

In any case, the common rule of thumb is that one should have saved between three and six times one’s annual salary by the time one reaches 50.

In the case of this Reddit poster, whose annual income is around $50,000, they may meet the criteria for the low end of the rule of thumb.

However, if they’re a high-income earner or are living in a pricey city, there’s a good chance that they’ve fallen behind. But the good news is there’s time to catch up as the person heads into the last decade and a half (or perhaps two decades) of their career.

Key Points About This Article

• It can be discouraging to find out you’re falling behind in retirement.
• There are ways to make up for lost time if you make the appropriate changes to sprint in the last rush to the retirement finish line!
• Also: Is your 401(k) optimized for your retirement plans? (Sponsored)

Starting slightly late or with less just means you should hit the gas a bit with savings and investing.

In any case, I think the individual is on the right track. They’ve been contributing to their 401(k) and using the proceeds to invest wisely (all of it is in the S&P 500). That said, I do think there’s a bit of room to hit the accelerator just a bit more as the person looks to pull ahead. With some lifestyle adjustments and perhaps a slightly more aggressive savings plan, I do think they’ll be able to get a lot of bang out of their last two decades in the workforce.

For the readers at home, I’d strongly encourage checking in with a financial adviser about where you stand in your retirement roadmap. While you could compare your net worth with the averages for your age group, I believe you’d get far more value from a tailored plan. Remember, you can start saving for retirement late and still catch up or even pull ahead if you have the right plan in place.

Starting a bit late in the retirement savings game isn’t ideal, but you can’t turn back time.

There’s no better time to get started saving and investing than now. Undoubtedly, with the right support group, game plan, and strategy, those who feel behind should do what’s in their power to catch up. Whether that entails maximizing retirement contributions, cutting their monthly expenses, investing in stocks (over savings or bonds), or crushing debts in their tracks, there are numerous ways to take one’s savings into overdrive in their later professional years.

In short, Redditor is behind, but not far enough behind that they can’t catch up, in my humble opinion. That’s why it’s crucial they hire a financial pro so they can optimize their plan and make up for lost time, so to speak.

Our partners over at SmartAsset (Sponsored) are definitely worth checking out if you’re looking to formulate your retirement plan.