Age 50 is a time to get serious about retirement if you haven't adopted that mindset already. While you may still have a good number of working years ahead of you, let's face it -- the bulk of your career is probably behind you at this point.
Fidelity says that by age 50, it's good to have six times your salary socked away for retirement. So if you're 50 years old with no money in savings, you're admittedly not in the best situation.
But don't panic. Even though a $0 IRA or 401(k) balance at 50 isn't optimal, you still have an opportunity to make up for lost time. The key, though, is to start prioritizing retirement savings immediately, and to invest your savings for maximum growth.
Start by putting the savings process on autopilot
If you've reached the age of 50 without any retirement savings, it means you're clearly not in the habit of setting money aside for that milestone. You don't need to beat yourself up over that. But you should make immediate changes to avoid a financial crunch down the line.
The best thing you can do in this situation is comb through your budget and see how much money you can free up each month for retirement savings purposes immediately. If it's a very small amount, you may need to cut a few expenses or take on a side hustle to come up with the money. You probably want to start contributing at least $500 a month to an IRA or 401(k) at this stage of life if you have a $0 balance to start with.
Once you figure out how much money you can contribute toward your savings each month, put the process on autopilot. You can do this by signing up for your company's 401(k), which will take the money out of your paychecks before they hit your bank account. Or, you can set up an automatic transfer to an IRA.
Invest in stocks
The other thing you'll need to be willing to do is invest your savings in stocks. While stocks can be risky, they have a history of offering strong returns. And if you're 50, you may not be retiring for another decade or more, which means you have time to ride out stock market volatility.
Over the past 50 years, the stock market's average annual return has been 10%. If you're able to sock away $500 a month in a retirement plan for the next 15 years and you score that same return, you're looking at a balance of around $190,000. If you decide you'll work until age 70, thereby giving yourself a 20-year savings and investing window instead of 15, you could end up with more like $344,000.
Focus on the future -- don't dwell on the past
It's sometimes easier to dwell on mistakes than take steps to address them. Clearly, it's not the best thing to be 50 without retirement savings. But it's also not the worst.
So rather than get upset over reaching this stage of life with no savings, make immediate changes to put yourself on a more positive path. Once you start seeing your nest egg grow, you may be able to find a way to make peace with your financial past and focus more on your future.
FAQs
Experts say you should have six times your salary saved for retirement by age 50. If you have $0 saved, immediately start automating contributions to a retirement account. It's not too late in life to invest in stocks to fuel your savings' growth.
What if I have no retirement savings at 50? ›
If you're over age 50 and have nothing saved for retirement, the situation could be grim. Sadly, your only alternative might be to keep working longer than you'd like. If you're younger, you still have time, but you probably need to move as quickly as you can.
What to do if there is no retirement savings? ›
If you retire with no money, you'll have to consider ways to create income to pay for your living expenses. That might include applying for Social Security retirement benefits, getting a reverse mortgage if you own a home, or starting a side hustle or part-time job to generate a steady paycheck.
Is it too late to save for retirement at 50? ›
Experts say even in your 50s, it's not too late to take steps to get in better financial shape. “While retirement is an exciting vision for a lot of people, the transition can be really stress-inducing,” said Keri Dogan, senior vice president of financial wellness and retirement income solutions at Fidelity.
How much should the average 50 year old have saved for retirement? ›
In general, by age 50, Fidelity says that you want to have about six times your annual income in retirement savings. So, for example, with a national median personal income around $40,500, you would want about $243,000 in your retirement account by age 50.
How to start over at 50 with no money? ›
How to start over at 50 with no money
- Wait it out at your old job if possible. A paying job that you hate will still give you financial stability. ...
- Let go of the negative self-talk. ...
- Build the new you. ...
- Update your resume with transferable skills. ...
- Take free courses to improve your skills.
Without savings, it will be difficult to maintain the same lifestyle an individual had in working years. Some retirees make adjustments by: Moving into a smaller home or apartment. Reducing television or streaming services.
What happens to retired people with no money? ›
You may have to rely on Social Security
Many retirees with little to no savings rely solely on Social Security as their main source of income. You can claim Social Security benefits as early as age 62, but your benefit amount will depend on when you start filing for the benefit.
Is $4000 a month enough to retire on? ›
If your Social Security and other retirement savings allow you to retire on $4,000 per month, you're likely in good shape to retire in many cities nationwide or abroad. Aside from the most expensive markets, $48,000 annually is enough for a comfortable retirement for many retirees.
How many people retire with no savings? ›
20% of adults ages 50+ have no retirement savings, 61% worry they won't have enough at retirement, as per new AARP survey. Plus six tips to start saving now.
Retirees who haven't saved enough often need to downsize their homes or work longer than they planned. Your family might feel responsible for helping you if they see you're struggling with money in retirement. Retirement should be something you enjoy, but it's hard to do that if you're under financial stress.
What is enough money to retire at 50? ›
Retiring at 50 requires significant savings to cover 30 or more years without income. Many experts suggest saving about six times one's annual salary by age 50, though individual needs vary. Early retirees must plan for healthcare expenses before Medicare kicks in at 65, potentially needing private insurance.
What is the best retirement plan for a 50 year old? ›
If you are at least age 50 by the end of the year, you can contribute to an IRA or make salary deferral contributions to a 401(k), 403(b), and/or 457 plan: IRAs: For tax year 2024, you can contribute the lesser of $7,000 or 100% of compensation to an IRA, or $8,000 if you're age 50 or older.
What is a good 401k balance at age 50? ›
Now, most financial advisors recommend that you have between five and six times your annual income in a 401(k) account or other retirement savings account by age 50. With continued growth over the rest of your working career, this amount should generally let you have enough in savings to retire comfortably by age 65.
What is the average social security check? ›
Average Social Security payments
Social Security payments vary widely from person to person, but the average monthly payout as of September 2023 is just under $1,707, while the maximum payment—for someone whose annual career earnings average $160,200 or more and retires at full retirement age—is $3,627.
How much do you really need to retire at 50? ›
Retiring at 50 requires significant savings to cover 30 or more years without income. Many experts suggest saving about six times one's annual salary by age 50, though individual needs vary. Early retirees must plan for healthcare expenses before Medicare kicks in at 65, potentially needing private insurance.
What percent of people over 55 have no money saved for retirement? ›
20% of adults ages 50+ have no retirement savings, 61% worry they won't have enough at retirement, as per new AARP survey. Plus six tips to start saving now.
How to catch up on retirement savings in your 50s? ›
If you discover you may come up short, here are five tips to help you catch up:
- Contribute more to tax-advantaged retirement plans. ...
- Explore ways to cut spending. ...
- Consider working longer or more. ...
- Get serious with “extra” money. ...
- Evaluate Investment Fees.
You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.
