Retirement Planning for Clients in Their 50s

Once they reach 50, catch-up contributions kick in. Be sure they are fully using this added contribution amount each year if they can afford to do so.

In 2025, the contribution limit for a 401(k) or similar defined contribution plan is $23,500 plus a catch-up contribution of $7,500. For 2026, the limit is $24,500, plus a catch-up contribution up to $8,000.

Note that for 2026, clients earning $145,000 or more will be required to make all 401(k) and similar employer-sponsored retirement plan catch-up contributions to a Roth option in the plan.

This is perhaps the most critical decade for many clients working toward having enough put away for retirement. This includes their 401(k), IRAs, fully funding a health savings account (if applicable) and even taxable investment accounts.

2. Sources of Retirement Income

It's important to have a handle on all potential sources of retirement income to create a relevant plan.

Income sources often include:

• Employer-sponsored retirement accounts such as a 401(k), 403(b) and 457
• IRAs
• Self-employed retirement accounts such as a solo 401(k) or SEP-IRA
• Defined benefit pension
• Stock compensation from an employer
• Social Security
• HSA
• Taxable investment accounts
• Annuities
• Self-employment income
• Rental properties

3. Retirement Timing and Lifestyle

The age at which clients retire will in part be tied to their financial situation. Retirement savings, Social Security and any pensions are key factors. Now is the time to figure out when they want to retire and what they want their retirement to look like.

In some cases, retirement might be phased in with a reduction in time spent working. This might mean starting their own business, such as consulting, in their early 60s and working on a reduced schedule before moving into full retirement.

Whether a full or phased retirement, the timing and scope of retirement will have a huge effect on the savings needed, and the savings in place now and anticipated in the coming years will have a large influence on their retirement planning.

Lifestyle choices will help clients determine their income needs in retirement. Will they stay in their current house? Will they downsize and/or move to a different part of the country or the world?

Activities in retirement are also a key factor. What do they plan to do? Perhaps they intend to travel or spend time on hobbies, interests that often have costs associated with them.

4. Social Security and Pension Planning

As part of the planning process, be sure to review clients’ projected Social Security benefits at various ages and any pension benefits they may have from a current or former employer.

When to claim Social Security is a key decision. For married clients, there is potentially more to consider. It can make sense for a lower-earning spouse to take their benefits earlier and the higher-earning spouse to wait. This can enable a higher survivor’s benefit for the lower-earning spouse if needed.

4. Debt Management

This is also an ideal time to review and manage clients’ debt levels. Do they have a large mortgage or significant credit card debt? As clients move into retirement, they will have more limited resources to pay down debt and to support themselves.

Work with these clients to set up a plan to reduce as much of a debt load as possible. Money not spent on debt management once clients retire is money they can spend on meeting their basic needs and, ideally, money that will allow them to spend on things they enjoy.

5. HSA Contributions

Make sure clients with access to a health savings account are maximizing their contributions. An HSA is associated with a high-deductible health insurance plan via their workplace or, in some cases, via individual or self-employed health insurance.

HSAs offer a triple tax advantage. First, contributions are made on a pre-tax basis offering a current-year tax advantage. Second, money grows tax-free in the account. Third, money withdrawn for qualified medical expenses is tax-free.

In addition, an HSA is another form of retirement savings in that the money can be used to help offset a client’s medical costs in retirement.

According to Fidelity’s 2025 Annual Retiree Healthcare cost estimate, an average 65-year-old can expect to spend an average of $172,500 on health and medical expenses during retirement.

Having an HSA in place can help cover some of these costs and do so in a tax-efficient way. Most HSAs allow for the funds in the account to be invested.

6. Estate Planning

In the case of a married couple, proper estate planning can help ease the process of settling a late spouse’s estate and ensure that assets pass properly to the surviving spouse.

Having their will and beneficiaries on insurance policies and retirement accounts should be taken care of at a minimum. Beyond this, clients should consider having someone in place as their financial and health care powers of attorney.

This can help ensure that their affairs are properly managed in the event of temporary or permanent incapacity. On the financial side, this not only matters during their lifetime but is important in helping to ensure that their estate planning is carried out upon heir death.

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