Can You Still Retire a Millionaire If You Start Saving at 50?

You'll often hear that it's best to start saving for retirement at a young age. The reason is that the more time you give your nest egg to grow, the more you can take advantage of compounded returns in your portfolio.

But sometimes, life can get in the way of saving for the future. You may have spent your 20s grappling with student loan debt, your 30s juggling high child-care costs, and your 40s paying an expensive mortgage and helping your kids with college. It's therefore not inconceivable that you might reach the age of 50 without any money socked away in an IRA or 401(k).

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But don't panic. Even though 50 is a bit of a late start to the retirement savings game, you might still manage to eke out $1 million in savings by the time your career wraps up. Doing so, however, may require some serious lifestyle changes.

The numbers work out, in theory

It's certainly possible to retire a millionaire with a very late start if you prioritize retirement plan contributions from this point forward. The good thing about being 50 is that you're eligible to make catch-up contributions in an IRA or 401(k).

Let's say you have a 401(k) and can max out at $31,000 this year. Let's also assume you continue contributing $31,000 a year to your 401(k) until age 67, which is full retirement age for Social Security, based on your year of birth.

If your investments produce an 8% annual return, which is a bit below the stock market's average return, you could end up with a little more than $1 million by your 67th birthday. Even if your portfolio only gives you a 7% yearly return, you'd still be looking at about $956,000, which is pretty darn close.

That said, to go from having no retirement savings to maxing out a 401(k) plan, you'll probably need to make significant changes to your spending. That could run the gamut from downsizing to trading in a car for a cheaper model to taking more staycations than vacations over the next few years. It might also mean having to work a side job to avoid too many drastic lifestyle changes.

However, if you're willing to make the effort, it's possible to end up with $1 million for retirement, even with a start as late as yours. That should give you some reassurance if your 50th birthday is nearing and you're staring at an IRA or 401(k) balance you aren't happy with.

What to do if you don't end up a retirement millionaire

Some people tend to fixate on hitting the $1 million mark in time for retirement. But when you think about it, it's a pretty arbitrary number. And if you're late to funding your nest egg, you may have to get on board with a different savings goal.

Let's say you can only save $800 a month for retirement over the next 17 years (which, to be clear, is still pretty impressive). And let's say your investments only give you a 7% yearly return. That will leave you with almost $300,000 in savings. And if you're willing to work a few more years, that number could be even higher.

Plus, working a bit longer could make it possible to delay Social Security past full retirement age for larger monthly checks. That extra guaranteed income could help make up for a smaller savings balance.

Finally, don't discount the possibility of working in retirement. Holding down a part-time job could improve your financial situation tremendously. And if you find a job or freelance gig you like, you may not even mind having to work for money later in life.

A 2024 AARP survey found that 20% of Americans 50 and over have no retirement savings. If that's your situation, you're clearly not alone.

However, you also have a good chance of retiring comfortably if you start saving now. You may not reach the $1 million mark, but you could end up with a nest egg that meets your needs nicely.

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