Over 50 and Starting Late? How to Catch Up on Retirement Savings Starting In 2026

"For Americans ages 45 to 54, the median 401(k) balance is just $67,769 according to Vanguard's How America Saves Report. This is far less than most people need to be ready to retire. Things don't get much better for those ages 55 to 64, either, with the median balance going up to just $95,642. A nest egg of only $95,642 would produce only $3,538 at a safe 3.7% withdrawal rate."

"Accounts like a 401(k) and IRA allow you to reduce your taxable income based on the amount of contributions that you make during the year. For example, for each $1,000 you invest, you can save up to $220 on your taxes if you are in the 22% tax bracket (your savings will be more if you're in a higher bracket or less if you're in a lower one)."

Median 401(k) balances for Americans ages 45–54 and 55–64 are $67,769 and $95,642 respectively, far below typical retirement needs. A $95,642 nest egg would generate only $3,538 annually at a 3.7% safe withdrawal rate. Tax-advantaged accounts such as 401(k)s and IRAs reduce taxable income and can yield substantial tax savings, for example saving up to $220 on taxes per $1,000 invested at a 22% bracket. In 2025, base contribution limits are $24,500 for 401(k)s and $7,500 for IRAs, with extra catch-up allowances after age 50. Maximizing these contributions, including catch-up amounts, can rapidly grow retirement savings; investing $31,000 from age 50 to 67 can exceed $1.2 million.

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