Retirement Planning Strategies for Late Starters

Retirement planning is a crucial component of building a financially secure future. But even if you just started saving for retirement at 50, there are strategies you can still use to catch up. Late starters should begin by setting realistic retirement goals, increasing their contributions to retirement accounts and considering lifestyle changes.

Brandon Renfro, RetireGuide Reviewer
  • Written by
    Brandon Renfro, Ph.D., CFP®, RICP®, EA

    Brandon Renfro, Ph.D., CFP®, RICP®, EA

    Retirement and Social Security Expert

    Brandon Renfro is a Retirement and Social Security Expert and financial planner. He focuses on helping clients create a secure financial future in retirement and co-owns Belonging Wealth Management. He is also a former finance professor and writes for several publications.

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  • Edited By
    Lamia Chowdhury
    Lamia Chowdhury, editor for

    Lamia Chowdhury

    Financial Editor

    Lamia Chowdhury is a financial content editor for RetireGuide and has over three years of marketing experience in the finance industry. She has written copy for both digital and print pieces ranging from blogs, radio scripts and search ads to billboards, brochures, mailers and more.

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  • Financially Reviewed By
    Toby Walters, CFA®
    Toby Walters, CFA

    Toby Walters, CFA®

    Chartered Financial Analyst and Paraplanner

    Toby Walters, CFA®, has over 25 years of financial research experience. With a knowledge and understanding of researching and analyzing financial data, he has developed a unique and experienced viewpoint on money matters. He has been a chartered financial analyst since 2003, and most recently a portfolio analyst and paraplanner.

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  • Published: April 19, 2023
  • Updated: August 12, 2023
  • 8 min read time
  • This page features 2 Cited Research Articles
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A qualified expert reviewed the content on this page to ensure it is factually accurate, meets current industry standards and helps readers achieve a better understanding of retirement topics.

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How to Cite's Article

APA Renfro, B. (2023, August 12). Retirement Planning Strategies for Late Starters. Retrieved April 16, 2024, from

MLA Renfro, Brandon. "Retirement Planning Strategies for Late Starters.", 12 Aug 2023,

Chicago Renfro, Brandon. "Retirement Planning Strategies for Late Starters." Last modified August 12, 2023.

Key Takeaways
  • Set realistic retirement goals by calculating your current savings, estimating your retirement expenses and determining how much you need to save each month.
  • Maximize workplace retirement plans and Social Security benefits to boost your savings over time.
  • Consider making any lifestyle changes to ensure financial stability in retirement.

There are plenty of reasons why you may just now be thinking about retirement planning. Maybe you’ve been focused on getting your kids through college and on their feet, or you’re recovering from medical expenses, a job loss or career changes. For some people, it seems like there’s nothing in particular — life just comes fast and you realize you’re behind.

However, just because you’re getting started late doesn’t mean there’s nothing you can do to improve your situation. At 40, you’re still 20 or more years away from retirement. Even if you are 50, you still likely have a decade or longer before you retire.

Using tools like a retirement calculator can help you gauge the age at which you should retire based on your current savings plan. It can also help determine how much you should be contributing to your retirement account to fit your needs.

There are certainly some challenges that come with getting a late start on your retirement savings. For one, you don’t have as much time to let the power of compounding returns work for you. But that doesn’t mean you can’t still make significant improvements. There are still many things you can do to catch up and close the gap.

Set Realistic Retirement Goals

One of the most practical things you can do to help yourself as a late starter is to set realistic goals. You may need to work longer if you are able to do so or plan to live a more modest lifestyle in retirement to reach your goals.

Although calculations are a major aspect of setting goals, the benefit of setting realistic goals isn’t just about the numbers, it’s also about motivation. Sometimes when things seem too hard or out of reach, you can be tempted to give up. However, if you set goals that you can reasonably expect to achieve, you are more likely to continue working toward them.

So how do you know if your goals are achievable? The following is a general guide. You’ll need to spend some time digging into each step to decide exactly how you want to approach them.

How To Set an Achievable Retirement Budget
Get an idea of where you stand.
Consider your current savings and other benefits like Social Security, pensions or annuities that will cover your income in retirement.
Consider your retirement expenses.
How much do you currently spend each month? What do you spend your money on? Evaluate how your budget might change over time and especially once you retire. Don’t forget to include health care, any lifestyle changes and taxes.
Estimate how much you would need to save each month.
Assume you estimate that you’ll need $4,000 per month to cover your expenses, and you expect to get $2,000 per month from Social Security. That’s $2,000 per month you’ll need to cover with your retirement savings. So, $2,000 would be your savings target.
Federal regulators recognize how difficult it can be to save for retirement, particularly later in life. That’s why there are rules in place for those 50 and over to contribute even more than younger savers.

Increase Contributions To Retirement Accounts

Maximizing your contributions to your retirement accounts will go a long way toward boosting your savings.

The annual limit for 2023 for common workplace plans like 401(k)s, 403(b)s and 457(b)s is:
  • $22,500 if you are under 50.
  • If you are 50 or over, the limit is $22,500 + a catch-up contribution of $7,500.

If you are 50, then you can contribute $30,000 per year to your retirement plan. Even with a modest 6% return, you would have a little over $395,000 after 10 years if you started with nothing. If you still have 20 years until retirement, then that same contribution would grow your account to slightly more than $1.1 million. These amounts can have a substantial impact on your retirement.

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Reduce Your Debt

Think of retirement planning as balancing two sides of an equation. On one side, you have income sources like savings and Social Security that will add funds to your budget. On the other side, you have expenses like food, housing and health care that will remove funds from your budget. You can improve your retirement readiness by addressing both sides of this equation.

Reducing your debt is a great way to manage your expenses and give yourself greater financial flexibility. For some, that might mean completely eliminating debt, while others may carry some debt into retirement. Either outcome is okay; the important thing is to ensure you aren’t carrying unmanageable debt.

For example, a large credit card balance with a 20% interest rate would be a very expensive debt (and possibly an indicator of other financial issues). Prioritize paying off these types of debt first. This will reduce your expenses and free up money for additional savings.

Diversify Your Investment Portfolio

It may be tempting to chase hot investments in the hope of growing your savings quickly, but that’s a risky game to play with your retirement funds. Today’s profits can quickly become tomorrow’s losses.

Instead, divide your savings across different investments. This will allow you to grow your portfolio while reducing unnecessary risk. This is called portfolio diversification. You can achieve diversification by using index funds, like the S&P 500. Investing in a single index fund exposes you to the entire index without the need to purchase each individual stock or bond on your own.

Asset Allocation

A closely related idea that often goes hand in hand with diversification is asset allocation. Asset allocation is how you divide your investments between different asset classes. For example, 60% of your portfolio in stocks and 40% in bonds.

Your asset allocation choice largely determines your risk levels and the long-term return you can expect. The larger your stock portion is, the greater your expected return will be.

However, it also means your portfolio is likely to fluctuate more from year to year. You’ll need to consider both your return expectations and risk tolerance when choosing your asset allocation. In addition to stocks and bonds, your asset allocation may include things like real estate, commodities or annuities.

Ways To Generate Additional Income
  • Retirement doesn’t mean you have to stop working entirely. Many people find the social aspect of working part-time in retirement to be very rewarding. It may also provide you with the needed financial stability to make retirement achievable.
  • You may have useful skills or experience that you can leverage to earn income as a consultant.
  • Your company may offer a type of phased retirement or a prolonged period of transferring your knowledge or training your replacement. If they don’t already offer it, they may be willing to discuss it with you.

Lifestyle Changes

You may also benefit from making some changes to your lifestyle to reduce your expenses. This may include simpler things like living closer to the places you frequent — to reduce travel costs — or bigger decisions like moving to a new city or state.

Consider Downsizing

A large house often means more upkeep, higher utility costs and higher property taxes. Downsizing can reduce all those things. If you step down to a smaller home, you may even be able to pocket some equity to boost your retirement savings.

Explore Relocating Options

If you’re open to the idea of moving somewhere new, consider the cost-of-living differences between locations. If you currently live in an expensive area, you can make your retirement dollars go further by moving someplace cheaper.

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Maximize Your Social Security Benefits

Social Security provides a solid foundation for your retirement income. It isn’t dependent on the stock market and it adjusts for inflation each year. As a late starter, it’s likely to serve an even larger role in your retirement — meaning, it’s important to maximize your benefits.

Delay Filing

Your Social Security benefit is determined in part by the age at which you begin receiving your benefit. The later you wait to file, the higher your benefit will be. You can earn delayed credits until you turn 70.

Although there are several factors that affect your claiming decision, such as your life expectancy, you should carefully consider waiting.

Spousal Benefits

If you are married, plan your claiming strategy with your spouse for the optimal spousal benefit. You will typically receive the greater of your benefit based on your own earnings record, or up to half of your spouse’s benefit.

Speak with a Financial Advisor

You may benefit from additional one-on-one guidance. A trained financial planner can help you identify the best approach for reaching your personal financial goals if you may be behind. Financial advisors provide a range of services. When it comes to choosing a financial advisor, consider certain qualifications and backgrounds that may be more suited to your needs as a late starter.

Try looking for an accredited advisor who specializes in retirement planning and can help address your specific retirement goals. Make sure to compare different advisors’ costs to find one that fits within your budget.

Editor Malori Malone contributed to this article.


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Last Modified: August 12, 2023

2 Cited Research Articles

  1. (n.d). Benefits for Spouses. Retrieved from
  2. (n.d). Delayed Retirement Credits. Retrieved from