Key takeaways

  • Reach your retirement goal by diversifying your savings approach. Contribute to any employer-sponsored account for which you’re eligible, private retirement accounts and/or and investment portfolio.

  • At age 50, you can make catch-up contributions to 401(k) and IRA accounts over the regular limits. Making retirement contributions also generally reduces your tax burden.

  • You can also use your home’s equity to help you increase retirement savings if you own your home. A home equity agreement allows you to obtain a percentage of your home’s value in cash now.

Saving for retirement is a daunting task. Planning for something decades in advance just doesn’t come naturally. If you haven’t met your retirement savings goals as you hit age 50, it’s not too late to increase your savings.

Most Americans save for retirement by contributing to employer-sponsored 401(k) accounts. Savvy savers also contribute to individual retirement accounts (IRAs), their own investment portfolios and other savings vehicles. Homeowners can also consider tapping into their home equity through a home equity agreement.

If you’re approaching retirement age with less savings than you had hoped, you can still reach look toward reaching your goals by saving shrewdly and reallocating your investments.

How to do it

No individual’s retirement goals will match another’s. Achieving your unique savings goals depends on several factors. These include your:

  • Expected lifestyle

  • Medical expenses and life expectancy

  • Retirement date

  • Outstanding debts

  • Sources of retirement income

When you begin saving at 50, setting realistic goals is important. Most of your working years have passed. Yet most Americans also enter their highest-income bracket in their 50s and 60s.

You can still reach your retirement savings goals by increasing 401(k) or IRA contributions.

BONUS READ: 6 Late-Stage Retirement Catch-Up Tactics from Investopedia

To determine how much you should save, review your savings to date. What’s “enough” will depend on your lifestyle, expenses and support from family members. Get an idea with one of many retirement calculators available online.

Next, evaluate your debts. Long-term outstanding debts prevent people from contributing to retirement savings. A recent Fannie Mae study found that less than half of homeowners aged 60 and 70 still have a mortgage. Even if you still have a mortgage, you can use your home’s equity to contribute to retirement savings.

Employing a mixture of the methods below will help you reach your goals.

Retirement savings strategies

If you’re looking to kick savings into overdrive at age 50, take the following steps to reach your goals.

Increase your retirement savings at age 50 by reallocating your portfolio and even accessing home equity.

1. Maximize retirement account contributions.

Most employers provide a retirement savings plan, such as a 401(k), 403(b) or 457 plan.

Some of these plans allow you to arrange automatic contributions by transferring a designated amount from your earnings into the savings account. Many employers also provide matching contributions up to a certain threshold (e.g., matching your 5% contribution for 10% total).

If you don’t already have an individual IRA (either traditional of Roth), check to see if you can open one. With a  traditional IRA, your contributions usually are tax-deductible when you make them. With a  Roth IRA, you’re taxed when you make your contribution, but withdrawals are tax-free.

The amount you can contribute depends on your income level. For 2022, before age 50, you may contribute up to $20,500 to most employer-sponsored 401(k) plans. The maximum contribution to an IRA account is $6,000. But as soon as you hit age 50, you can make a $6,500 catch-up contribution to the 401(k) and $1,000 to the IRA.

Consult a tax advisor to determine the best strategy for you.

2. Open a health savings account

A recent retirement study found that a couple in their mid-60s will spend almost $300,000 on healthcare during retirement. An unexpected healthcare need can entirely deplete your life savings.

Some people who are covered under a qualified high-deductible health plan can open and contribute to a health savings account. Like retirement accounts, health savings accounts (HSAs) are also tax-favored. Any contributions to an HSA are tax-free. Any withdrawals will be tax-free as well, so long as you use the funds to pay for qualified medical expenses.

WATCH: When you have zero saved for your retirement

You may also consider long-term care health insurance. This provides reimbursement for extended medical care, skilled nursing and assisted living facilities.

3. Review your other sources of retirement income.

Like retirement savings accounts, other investments can support you during retirement. At age 50, you may want to rebalance your portfolio for a more conservative mix.

Many people put a greater percent of investments into bonds, and less in stocks. Others might contribute to target-date funds. These funds automatically read just their portfolio allocations as your hoped-for retirement date approaches.

4. Access home equity with a home equity agreement

Your home is likely your largest asset. However, its equity remains untapped until you put it to use. That’s where a home equity agreement comes in.

Most people finance a home purchase using a mortgage. The difference between what you owe and the amount you’ve paid is your equity value.

If you own your home outright, then you have complete equity up to the home’s value. But if you owe $100,000 on a home worth $500,000, you have equity of $400,000.

A home equity agreement (HEA) allows you to tap into that equity without amassing more debt. Unlike a loan, a HEA requires no monthly installment or interest payments. Instead, the HEA provider offers you cash up front in proportion to a percentage of your home’s equity when you sell later on.

You can use these funds in any way you see fit – including to up your retirement savings. Consider this a lump sum without interest that you deposit directly into your retirement savings portfolio.

Use a HEA from Unlock Technologies to maximize retirement savings

Hitting age 50 without meeting your retirement savings goals doesn’t have to be unnerving. You can still work toward reaching your retirement savings goals by taking steps such as maxing out your 401(k) or IRA contributions, reallocating your investment portfolio, and opening a health savings account. Another option for homeowners who have built up equity in their homes is to access that equity through a home equity agreement. Unlock Technologies equity specialists can help.

Contact us today to get started.

The blog articles published by Unlock Technologies are available for informational purposes only and not considered legal or financial advice on any subject matter. The blogs should not be used as a substitute for legal or financial advice from a licensed attorney or finance professional. Links in our blogs to third-party websites are provided as a convenience and for informational purposes only; they do not constitute an endorsement of any products, services, or opinions of the corporation, organization, or individual. Unlock bears no responsibility for the accuracy, legality, or content of the external site or for that of subsequent links.

The blog articles published by Unlock Technologies are available for informational purposes only and not considered legal or financial advice on any subject matter. The blogs should not be used as a substitute for legal or financial advice from a licensed attorney or financial professional. Links in our blog posts to third-party websites are provided as a convenience and are for informational purposes only; they do not constitute an endorsement of any products, services or opinions of the corporation, organization or individual. Unlock Technologies bears no responsibility for the accuracy, legality, or content of external sites or that of subsequent links.