When you reach your 50s, retirement begins to feel closer. While many people aim to retire in their 60s, more are choosing to retire early or switch to part-time work before fully retiring. This decade brings some key milestones for retirement savings and withdrawals. It’s also a good time to start thinking about your ‘retirement vision,’ which covers the non-financial aspects of this stage of life.

1. Key Milestones

Age 50: Catch-up Contributions Start

Once you turn 50, you can start making extra contributions to your retirement plan, like a 401(k) or 403(b). For example, in 2026, you can add an extra $8,000 on top of the standard $24,500 limit. This can significantly boost your savings as you near retirement. If you made more than $150,000 last year with the same employer, you must make these extra contributions after taxes to the Roth part of your plan.

Age 55: HSA Catch-up Contributions Start

Health Savings Accounts (HSAs) help you save for future healthcare costs and offer tax benefits. Starting at age 55, you can put in an extra $1,000 each year, beyond the usual limit of $4,400 for individuals or $8,750 for families. For more details, see our blog post on the ABCs of HSAs.

Age 55: Penalty-Free Withdrawals from Some Plans

This milestone can be complicated because there are specific rules for taking penalty-free withdrawals from 401(k) or 403(b) plans. If you plan to retire before age 59 and a half, it’s important to know these details. To qualify, you must leave your job after turning 55. If you do, you may be able to withdraw from your old workplace retirement plan without penalty, but you will still owe regular income tax. Also, the money must stay in your former workplace plan and cannot be moved to an IRA. This is commonly called the “Rule of 55”.

Age 59½: Penalty-Free Withdrawals from Retirement Plans

Once you reach this age, you can start taking money out of qualified retirement plans, including IRAs, without paying a 10% penalty (withdrawals are still subject to taxes). For Roth accounts, age 59 & ½ is when you can withdraw both contributions and earnings tax-free and penalty-free, provided the account has been open for at least 5 years.

Because the rules for taking money from retirement accounts can be complex, it’s a good idea to keep 10% to 20% of your retirement savings in other types of accounts. This gives you more options if you want to retire early or move to part-time work.

2. Craft Your Retirement Vision

A common part of retirement planning that people forget is thinking about how they will spend their time. Even with your finances in order, retirement can feel empty if you do not have meaningful activities. Without them, you might get bored and miss the purpose your job gave you.

Because hobbies and interests take time to grow, begin exploring activities outside of work before you retire. If you retire with plans for things like travel, spending time with grandkids, or playing pickleball, you are more likely to enjoy your retirement.

A helpful way to plan is to choose activities from each of these three categories, which can help you stay healthy and active as you age:

• Hobbies That Move Your Body – Pick something you enjoy that also keeps you active. This can help you stay healthy and live longer. Examples are walking, biking, golf, gardening, or pickleball.
• Hobbies That Engage Your Mind – Staying mentally active helps protect your brain as you get older. Try painting, reading, playing games, or taking a class at a local college.
• Hobbies That Keep You Connected to Others – Doing activities with other people gives you social support and helps build strong relationships. Examples include book clubs, mahjong groups, team sports, and volunteering.

Consider what you enjoy and begin building these habits and connections before you retire. Activities like tennis or pickleball can cover all three areas: movement, mental engagement, and social time. Travel is another option that keeps you active, social, and mentally engaged.

3. Create Your “Stop Doing” List

Retirement planning involves more than figuring out what you want to do; it also means deciding what you are ready to give up. By drawing up a list of things to stop doing, you can make space for the people, activities, and priorities that matter most by cutting back on commitments, habits, and expenses that no longer benefit you.

Begin by looking at how you currently allocate your time, energy, and money. List the obligations or routines that seem to be draining, unnecessary, or inconsistent with the kind of life you want to have in retirement; these could be things like keeping possessions that you rarely use, attending events out of habit, taking up work that you no longer enjoy, or paying for services and memberships which provide only a small amount of value.

Select one or two items to deal with first and then decide if you should eliminate, delegate, reduce, or replace each one. Keep going back to the list as your situation changes. By making these decisions before you retire, you can save resources, reduce stress, and enter retirement with better boundaries and more time for the vision you want to create.

Final Thoughts

Your 50s are an important time to focus on your retirement goals. By looking after your savings, knowing the key milestones, and thinking about how you want to spend your days, you can approach retirement with confidence and look forward to a future that feels truly your own.

Mary McCraw, CFP®
Vice President

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