The 'Power Decade' Strategy: How to Build a Retirement Fund Between 50 and 60 When You're Starting Late

It’s never too late to start saving money for your retirement. While it’s best to start saving as early as you can, if you start at age 50, a “power decade” can help you get closer to your retirement savings goal.

Your 50s and 60s can be high-impact years since you’re likely earning more than you were in your earlier working years, and you can start making catch-up contributions. Here’s what to do.

Why your 50s can still be a powerful catch-up window

In your 50s, you may have a higher income than you did in earlier years and potentially — depending on your situation — fewer expenses. For instance, grown children may be out of the house. That means it’s time to take advantage of your ability to save.

The IRS sets contribution limits to retirement savings accounts such as 401(k)s but investors age 50 and older can contribute more. In 2026, they can contribute $8,000 on top of the typical $24,500 limit, amounting to a total contribution of $32,500. Note that for people ages 60-63, the catch-up contribution limit in 2026 is $11,250, leading to a $35,750 total contribution limit.

There are also catch-up contributions for individual retirement accounts (IRAs). In 2026, the contribution limit for these accounts is $7,500 per year, and the catch-up contribution for people 50 and older is $1,100. That comes to $8,600 per year combined.

What to do during the first year of your savings plan

You don’t need to go from zero savings to a complete retirement portfolio by the end of the year. The important thing to do during these first 12 months is to take an inventory of your current finances and take action.

Start by calculating what you have saved across your 401(k)s, IRAs, health savings accounts (HSAs), taxable brokerage accounts and any other bank or investment account. Then, review your monthly expenses and look for ways to save money. Getting rid of unused subscriptions and reducing the amount you dine out can help, but cutting down on housing and transportation will likely save you more.

When contributing to retirement plans, make sure you prioritize contributing enough to a 401(k) or similar account to get an employer’s match first, if one is available, since that’s essentially free money. Then, you can increase savings to that account and others up to the IRS limits, if the account has one. You can use a compound-interest calculator to test how your portfolio can grow over time, with timeframes set for the next 10, 15 and 20 years. Those calculations can help you understand where you’re at now, and how much you have to save during this power decade.

Consider your Social Security strategy

It’s smart to focus on maxing out your contribution limits during your power decade, but there are a few other key moves you can make. The longer you delay tapping Social Security, even if it is just for a few years, the more it will increase your benefit check. That will give your nest egg more time to grow.

People who were born in 1960 or later reach full retirement age at 67. It often makes sense to delay Social Security until that point at least. But if you delay until age 70, you can maximize how much you recent in benefits.

Working a few extra years can mean delaying Social Security and contributing more to your savings accounts.