Retirement may be approaching quickly for millions of Americans without access
to a dedicated workplace retirement plan.
Starting in your 50s or early 60s is far from ideal, but it doesn’t mean you’ve
run out of options. Several moves could still improve your retirement plan, from
taking advantage of higher contribution limits to reconsidering when you stop
working and claim Social Security.
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Millions are approaching retirement without a workplace plan
New data from AARP shows that about 40% of private-sector workers ages 55 to 65
lack a workplace retirement plan. The problem extends further down the age
range, with 41% of private-sector workers ages 45 to 54 also lacking a workplace
plan.
Many households have struggled to find room in their budgets after paying for
housing, groceries, healthcare, child care, and other necessities. Lack of
access to employer-sponsored plans creates another barrier, while some workers
who have managed to save have had to tap those accounts before retirement.
Payroll Integrations found in a 2025 survey that 38% of workers across
generations had withdrawn money from their retirement accounts. Among Gen Xers
and baby boomers, the share was 41%.
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Start saving even if retirement is close
Reaching your late 50s without retirement savings may understandably leave you
wondering whether starting now would make much difference. Even five or 10 years
of contributions could still create another source of retirement income.
Workers with access to a 401(k) might begin there, particularly if an employer
offers matching contributions. Those without a workplace plan may be able to use
an IRA, while self-employed workers have options such as SEP IRAs and solo
401(k)s.
Catch-up contributions may accelerate savings
The tax code gives older workers additional room to save as their retirement
date gets closer. Once you reach age 50, catch-up contribution rules allow you
to put more into certain tax-advantaged retirement accounts than younger workers
can.
For 2026, the regular employee contribution limit for most 401(k), 403(b), and
governmental 457 plans is $24,500, with a standard age-50-plus catch-up
contribution of $8,000. Workers ages 60 through 63 could potentially contribute
even more to workplace retirement plans under the enhanced catch-up rules
created by SECURE 2.0. Their higher catch-up limit is $11,250 in 2026, rather
than the regular $8,000 catch-up.
Someone starting late may not be able to max out those limits, and doing so
shouldn’t come at the expense of necessities or high-interest debt. Still,
increasing contributions gradually might make a meaningful difference.
An employee might start by contributing enough to receive their full employer
match and then raise the percentage whenever their salary increases or another
expense disappears.
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Working longer could help in several ways
Delaying retirement isn’t an attractive or realistic option for everyone,
particularly workers dealing with health issues or physically demanding jobs.
However, someone who could comfortably remain employed for a few additional years
may strengthen their finances in several ways at once.
Continuing to work provides more time to save, shortens the number of years
those savings need to support, and could delay the point when withdrawals begin.
Delaying Social Security could raise your check
With limited retirement savings, Social Security may become a much more
important source of income, making the claiming decision particularly important.
Retirement benefits generally begin at 62, but claiming before full retirement
age permanently reduces the monthly amount. Waiting beyond full retirement age
increases the benefit through delayed retirement credits until age 70.
For workers born in 1960 or later, the full retirement age is 67. Waiting until
70 would increase the monthly benefit to 124% of the amount available at full
retirement age.
Delaying isn’t automatically the best choice. Health, employment, life
expectancy, marital status, and immediate financial needs all matter. A worker
who needs the income at 62 may have little choice but to claim. Still, those who could afford to wait may be able to lock in a larger monthly income stream for the
rest of their lives.
Take a hard look at retirement expenses
Someone expecting retirement to cost roughly the same as their working years may
discover opportunities to lower that number. Paying down expensive debt,
reducing housing costs, or eliminating unnecessary recurring expenses before
leaving work could reduce how much income you’ll need later.
Housing deserves particular attention because it is often one of the largest
expenses in retirement. Downsizing, paying off a mortgage, or relocating may
substantially change the amount of savings required, although each option comes
with its own costs and trade-offs.
Building even a small emergency fund might also help prevent an unexpected
repair or medical bill from immediately pushing you into debt.
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Social Security may need to do more of the work
If savings still fall short despite those steps, Social Security may need to
cover a larger share of your retirement expenses. Social Security replaces only
part of a worker’s pre-retirement earnings, with the replacement rate varying by
earnings level, which means someone relying primarily on benefits may need to
adjust their expected retirement lifestyle.
Knowing your estimated benefit may provide a useful starting point. From there,
compare expected Social Security income with housing, food, healthcare,
transportation, taxes, and other likely expenses. Any gap shows roughly how much
additional savings or employment income you’ll need to generate.
Bottom line
Reaching your 50s or early 60s with little retirement savings creates a serious
challenge, but giving up on saving could make the situation worse. The years
that remain before retirement still provide opportunities to build savings,
lower future expenses, and potentially increase guaranteed income by delaying
Social Security when circumstances allow.
You may not be able to recreate the portfolio you could have built by starting
at 25, but it is still possible to save money in retirement with focused action. Every additional dollar saved and every
recurring expense reduced could make your finances more manageable when the
paycheck eventually stops.Â
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