As the Head of Financial Planning at Citizens Wealth Management, Jason is a strategic partner who creates the strategy, manages the planner teams, and coordinates personal financial planning activities across the company to help clients deal with and grow in new situations.
Today, the average American retires at around age 63. But what if youre thinking about how to retire at 50 instead?.
For some people, this type of early retirement is their top financial goal. They want to spend their early years working hard and giving up things so that they can live the rest of their lives the way they want to.
While its possible to push your retirement date up by 10-plus years, its bound to take more than living below your means throughout your 20s, 30s, and 40s. Youll also have to maximize your biggest accumulation years and make savvy investment decisions along the way.
There are lots of factors at play when trying to retire by 50. Here are eight considerations to get you started.
Are you getting close to 50 and wondering if your finances are in order? Maybe you grew up listening to Van Halen and Bon Jovi and now it seems like you need to start planning for retirement. Don’t worry! Your 50s may feel like the last few years before retirement, but you can still make real progress with your money.
I’ve put together this comprehensive guide to help you understand where you should ideally be financially at 50 along with practical steps to improve your situation no matter where you’re starting from.
The Financial Benchmarks for Age 50
Let’s get straight to the numbers. Financial experts suggest these targets for 50-year-olds
Savings & Net Worth
- Emergency Fund: 3-6 months of living expenses saved for unexpected costs
- Retirement Savings: 3-5 times your annual salary
- Net Worth: Ideally around 6 times your annual income
- Debt: Minimal high-interest debt, with a plan to eliminate it before retirement
According to financial services company Empower, the median net worth for people in their 50s is $1257943. But don’t panic if you’re nowhere near that number! This figure includes high-net-worth individuals, and the typical 50-year-old likely has a much lower net worth.
Mari Adam, a certified financial planner in Boca Raton, Florida, suggests that by age 50, you should have saved six to eight times your current annual income—possibly less if you’ll have a traditional pension.
8 Smart Financial Moves to Make in Your 50s
Your 50s represent a critical decade for retirement preparation. Here are eight key steps to take now:
1. Figure Out Where You Stand
Before making any financial decisions, you need a clear picture of your current situation. Calculate your net worth by adding up your assets (savings, investments, property) and subtracting your liabilities (debts).
This is also the perfect time to check your expected Social Security benefits. Create an online account at www.ssa.gov/myaccount to see estimates of your future benefits based on different claiming ages.
2. Get Serious About Saving
If your savings aren’t where they should be, don’t despair! The IRS allows “catch-up contributions” for folks 50 and older:
- 401(k) plans: In 2025, you can contribute up to $23,500 plus an additional $7,500 catch-up contribution for a total of $31,000
- For ages 60-63: You can contribute even more—an additional $11,250, for a total of $34,750
- IRAs: The standard cap is $7,000, plus a $1,000 catch-up contribution if you’re 50+, totaling $8,000
3. Leverage Health Savings Accounts (HSAs)
HSAs offer incredible tax advantages:
- Contributions are pre-tax
- Earnings grow tax-free
- Withdrawals for medical expenses are tax-free
In 2025, if you’re 55 or older, you can contribute up to $4,300 for self-only coverage or $8,550 for family coverage, plus a $1,000 catch-up contribution.
Bill Shafransky, a senior wealth adviser with Moneco Advisors, points out that HSAs can be “a saving grace” for retirement health expenses. After 65, you can even use HSA funds for non-medical expenses without the 20% penalty (though you’ll pay regular income tax).
4. Create a Smart Tax Strategy
If most of your retirement savings are in traditional 401(k)s or IRAs, remember that withdrawals will be taxed at your ordinary income rate. And once you turn 73, you must take required minimum distributions (RMDs) whether you need the money or not.
Chris Haigh, a certified financial planner, says that RMDs can cause some retirees to move into higher tax brackets. To avoid this:
- Consider directing some contributions to a Roth 401(k) if available
- Invest in taxable brokerage accounts, which offer flexibility without RMDs
5. Crush High-Interest Debt
Credit card debt at 26. 99% interest will absolutely wreck your retirement plans. If you’re only earning 7% on investments and paying almost 27% on debt, saving money instead of paying it off is actually making you worse off.
However, low-interest debt like a mortgage at 3% might not be as urgent to pay off, according to Shafransky.
6. Plan for Long-Term Care
Almost two-thirds of people aged 65 will require some kind of long-term care at some point in their lives, and about one in five will require care for more than five years. As of 2024, nursing homes cost more than $111,000 a year, so even a few months can wipe out your savings.
Your 50s are the ideal time to explore long-term care insurance. Wait too long, and premiums become prohibitively expensive—or you might be denied coverage due to health conditions.
Some options to consider:
- Partial coverage policies (covering 25-50% of costs)
- Hybrid policies combining life insurance with long-term care benefits
- Self-funding by setting aside money specifically for future care needs
7. Evaluate Your Housing Situation
Most Americans (75% according to a 2024 AARP survey) want to age in place, but only 10% of homes nationwide are prepared for older adults’ needs. Only 40% have basic aging-ready features like step-free entryways and first-floor bedrooms/bathrooms.
Ask yourself:
- Will your home be accessible if mobility becomes an issue?
- Can you modify your home with ramps if needed?
- Should you consider relocating to a more age-friendly home?
8. Get Your Estate Documents in Order
Adam emphasizes that estate planning isn’t just about what happens after you die—it’s about protecting yourself while alive. You need:
- Financial power of attorney (allows someone to manage your money if you’re incapacitated)
- Healthcare power of attorney (gives someone the right to make medical decisions on your behalf)
Without these documents, your family might need to go through court proceedings to help manage your affairs.
What If You’re Behind?
If your finances aren’t where the “experts” say they should be at 50, don’t panic! Many Americans are in the same boat. Here are practical steps to improve your situation:
Boost Your Income
Consider these options:
- Ask for a raise or promotion
- Develop a side hustle
- Monetize a hobby or skill
- Consider part-time work
- Rent out a spare room
Track Your Expenses
Eric Ross, a CFP at Madison Wealth Management, recommends using apps like You Need a Budget (YNAB), Simplifi by Quicken, or Mint to track necessary versus discretionary spending. Understanding where your money goes is the first step to controlling it.
Maximize Your Social Security
Create an account at ssa.gov to verify your earnings history and understand your future benefits. The longer you can wait to claim (ideally until 70), the higher your monthly benefit will be.
Consider Working Longer
If your retirement savings aren’t where they should be, extending your working years—even part-time—can significantly improve your financial outlook by:
- Allowing more time for savings to compound
- Reducing the number of years you’ll need to live off savings
- Potentially enabling you to delay Social Security for a higher benefit
The Bottom Line
Financial well-being at 50 isn’t just about hitting specific numbers—it’s about having a clear plan for the future. While benchmarks provide useful guidance, your individual circumstances, goals, and values should shape your financial strategy.
The most important thing is to take action now. Your 50s are a critical decade for retirement preparation, as Mari Adam says, “It’s the most important decade to do things right and avoid major pitfalls.”
By implementing these strategies, you can set yourself on a path toward financial security, regardless of your starting point. Remember, it’s not about comparing yourself to others—it’s about making the best decisions for your unique situation and future goals.
What financial moves are you making in your 50s? Have you found other strategies that work well? I’d love to hear your experiences in the comments below!
FAQs About Financial Planning at 50
Q: I’m 50 and have very little saved for retirement. Is it too late?
A: Absolutely not! While catching up will require discipline, the catch-up contribution limits for 401(k)s and IRAs can help accelerate your savings. Focus on maximizing these contributions, reducing expenses, and potentially planning to work a few years longer.
Q: Should I prioritize paying off my mortgage or saving for retirement?
A: It depends on your mortgage interest rate and overall financial situation. If your mortgage rate is low (3% or less), you might earn more by investing that money instead of paying off the mortgage early. However, entering retirement debt-free provides peace of mind that many find valuable.
Q: How do I know if I’m on track for retirement?
A: Calculate your current net worth, review your retirement savings, and estimate your future expenses. Online retirement calculators can help determine if your savings rate will support your desired retirement lifestyle.
Q: What’s the biggest financial mistake people make in their 50s?
A: Not getting serious about retirement planning soon enough. Your 50s offer your last significant opportunity to build your nest egg before retirement, so use this decade wisely to save aggressively, eliminate high-interest debt, and develop a clear retirement strategy.
Build up your other tax-advantaged accounts
Putting what you can spare into a health savings account (HSA) is another strategy you might want to use if you’re healthy and in your 20s or 30s. HSAs are typically touted as a tax-efficient way to save cash for any health care needs not covered by insurance that you have today or in the near future. You can put money into an HSA before taxes, and your employer may even match it up to a certain point. The money grows tax-free, and as long as it’s used for qualified medical costs, you don’t have to pay taxes on what you spend.
The important thing to know about HSAs, though, is that they dont expire or need to be used by a certain point in time. Unspent money at the end of the year simply rolls over, and you can still keep adding more to the account.
More importantly, however, is that your HSA balance only remains limited to use for qualified medical expenses until you reach age 65. At that point, you can use the money for nonmedical expenses without paying a penalty, although you will have to pay your regular income taxes on it upon withdrawal. In this way, it works almost like a traditional 401(k). When you want to retire early, this can be a great way to save extra money that you can use as an extra source of income in the future.
Realizing your dream of early retirement
Figuring out how to retire at 50 isnt easy. Youre trying to build more wealth in less time, so naturally, thats challenging. It involves making financial sacrifices in your 20s, 30s and 40s, then using those savings wisely to build wealth. To better understand whats possible, use this retirement calculator to create different scenarios of your retirement plan based on age, savings contributions, and other factors.
Consulting with a financial professional can help you create a plan to proceed wisely and confidently during your younger years, so you can reap the benefits of an early retirement.
Looking for the right advisor to be your partner? Learn how a Citizens Wealth Advisor* can help you reach your financial goals.
