Navigating 401(K) Investments: Strategies For A 50-Something Investor

At 50, you can make catch-up contributions to your 401k. Maxing out your 401(k) at work with an extra $7,500 a year can add nearly $177,000 more by retirement than you would have if you hadn't made the catch-up contributions. Conventional financial wisdom says that you should invest more conservatively as you get older, putting more money into bonds and less into stocks.

Maximize 401(k) contributions

If you are 50 or older, you can make an additional catch-up contribution of $7,500 for a grand total of $30,500 to your 401(k). This is due to SECURE 2.0, if you are ages 60, 61, or 62, you can make a catch-up contribution of $11,500.

Conventional financial wisdom says that you should invest more conservatively as you get older, putting more money into bonds and less into stocks. The reasoning is that if your stocks take a tumble in a prolonged bear market, you won’t have as many years for prices to recover and you may be forced to sell at a loss.

Retirement saving benchmarks can put your portfolio’s value in perspective. For example, according to T. Rowe Price, by age 50, an individual should have six times their salary saved. That’s $420,000 for someone earning $70,000 a year.

Max out your 401(k) at work with an extra $7,500 a year, and you'll end up with about $177,000 more by retirement than you would have if you hadn't made the catch-up contributions.

Bankrate’s AdvisorMatch can connect you to a CFP professional to help you achieve your financial goals.

Invest conservatively

Conventional financial wisdom says that you should invest more conservatively as you get older, putting more money into bonds and less into stocks. The reasoning is that if your stocks take a tumble in a prolonged bear market, you won’t have as many years for prices to recover and you may be forced to sell at a loss.

When you are 50, you can make an additional catch-up contribution of $7,500 for a grand total of $30,500. In 2025, it's $23,500 for anyone under age 50. If you are older than 50, you can make a catch-up contribution of an additional $7,500.

Retirement saving benchmarks can put your portfolio’s value in perspective. For example, according to T. Rowe Price, by age 50, an individual should have six times their salary saved. That’s $420,000 for someone earning $70,000 a year.

Max out your 401(k) at work with an extra $7,500 a year, and you'll end up with about $177,000 more by retirement than you would have if you hadn't made the catch-up contributions.

Bankrate’s AdvisorMatch can connect you to a CFP professional to help you achieve your financial goals.

Utilize catch-up contributions

If you are 50 or older, you can make an additional catch-up contribution of $7,500 for a grand total of $30,500 to your 401(k). This is due to SECURE 2.0, if you are ages 60, 61, or 62, you can make a catch-up contribution of $11,500.

This is a great way to max out your 401(k) at work with an extra $7,500 a year, and you'll end up with about $177,000 more by retirement than you would have if you hadn't made the catch-up contributions.

Conventional financial wisdom says that you should invest more conservatively as you get older, putting more money into bonds and less into stocks. The reasoning is that if your stocks take a tumble in a prolonged bear market, you won’t have as many years for prices to recover and you may be forced to sell at a loss.

Retirement saving benchmarks can put your portfolio’s value in perspective. For example, according to T. Rowe Price, by age 50, an individual should have six times their salary saved. That’s $420,000 for someone earning $70,000 a year.

If you are 50 or older, you can contribute up to $30,500 in a 401(k) and up to $8,000 in an IRA.

Review retirement benchmarks

Retirement benchmarks can help you put your portfolio's value in perspective. For example, according to T. Rowe Price, by age 50, an individual should have six times their salary saved. That's $420,000 for someone earning $70,000 a year.

However, an even better check-in for midlife investors is to run a few different saving and investing scenarios through a good retirement calculator. The exercise will provide more accurate results than when you were younger and projected retirement expenses were fuzzier.

If you're age 50 or older, you can make an additional catch-up contribution of $7,500 for a grand total of $30,500. In 2025, it's $23,500 for anyone under age 50. If you are older than 50, you can make a catch-up contribution of an additional $7,500.

Conventional financial wisdom says that you should invest more conservatively as you get older, putting more money into bonds and less into stocks. The reasoning is that if your stocks take a tumble in a prolonged bear market, you won’t have as many years for prices to recover and you may be forced to sell at a loss.

Max out your 401(k) at work with an extra $7,500 a year, and you'll end up with about $177,000 more by retirement than you would have if you hadn't made the catch-up contributions.

Consider portfolio padding

Portfolio padding is a strategy that can significantly improve your retirement prospects. It involves maxing out your 401(k) contributions and making catch-up contributions to tax-favored retirement accounts. By saving $8,000 instead of $7,000 in an IRA from age 50 to 65 and earning a 6% average annual return, you can add nearly $24,000 to your savings by retirement. Similarly, maxing out your 401(k) at work with an extra $7,500 a year can result in about $177,000 more by retirement than you would have if you hadn't made the catch-up contributions.

As you approach retirement, it's important to evaluate your portfolio's value in the context of retirement saving benchmarks. According to T. Rowe Price, by age 50, an individual should have six times their salary saved. For example, someone earning $70,000 a year should have $420,000 saved. However, it's crucial to run different saving and investing scenarios through a retirement calculator to get more accurate results.

When it comes to investing, conventional financial wisdom suggests that you should invest more conservatively as you get older. This means putting more money into bonds and less into stocks. The reasoning is that if your stocks take a tumble in a prolonged bear market, you won’t have as many years for prices to recover and you may be forced to sell at a loss. However, now is not the time to ratchet back your exposure to stocks, as the market has been volatile recently.

To overcome past savings shortcomings, you can make catch-up contributions to your 401(k) and IRA. Americans aged 50 and up can contribute up to $30,500 in a 401(k) and up to $8,000 in an IRA. These contributions can help you reach your retirement goals and improve your overall financial health.

In summary, portfolio padding is a crucial strategy for improving your retirement prospects and reaching your financial goals. By maxing out 401(k) contributions, making catch-up contributions, and evaluating your portfolio's value, you can secure a more comfortable retirement.

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