AARP Warns of 6 Big Mistakes People in Their 50s Make When Saving for Retirement

Recently, the AARP outlined several retirement mistakes that people should avoid in their 50s if they want to retire on time. These mistakes, which range from making emotional investing decisions to prioritizing your kids' expenses above your own, aim to help people make sure they're on track for retirement.

After all, your 50s are a critical time for retirement planning. Steve Parrish, a professor at the American College of Financial Services, calls the five years before and after retirement the "retirement red zone" because the decisions people make in this narrow time frame can impact their retirement success for decades in the future.

Being in your 50s makes it hard to recover from financial mistakes

When you're in your 30s, making a financial mistake when it comes to your retirement accounts isn't ideal, but it's also possible to overcome them. When you're in your 50s, you don't have the same luxury of time in the market to correct investing missteps before retirement. That's why it's important to understand some of the most common mistakes people make in their 50s when it comes to retirement savings. Here are some examples.

1. Letting short-term demands take precedence over retirement savings

It's natural to want to send your children to college debt-free or help adult children who are struggling financially. However, those short-term demands shouldn't take precedence over your retirement plan. Your children have years to improve their financial situations, but you only have a short amount of time to make your final preparations before retirement. Make sure to prioritize your future needs above short-term demands.

2. Assuming your income will continue to grow until you retire

Because your 50s are often peak earning years for many people, many assume that their income will continue to grow until retirement. However, that may not be the case. It's important to prioritize savings now and ensure you're investing as much as possible for retirement. The workplace is constantly changing, and advancements in AI may mean that some people get laid off in a challenging job market.

3. Taking big risks trying to grow your nest egg

If you feel behind on your retirement savings, it may be tempting to purchase the latest stock pick, trying to catch up. However, risking your retirement funds hoping for a big return is incredibly risky. Instead, work hard to max out your retirement accounts, take advantage of catch-up contributions, and build an emergency fund to protect yourself as you transition into retirement.

4. Neglecting to max out catch-up contributions

In 2026, workers in their 50s can contribute a total of $32,500 to their 401(k). This includes the standard contribution of $24,500 plus an $8,000 catch-up contribution. Workers who are between the ages of 60 and 63 can contribute $35,750 total, which includes a $11,250 super catch-up contribution. Taking advantage of these catch-up contribution opportunities is many people's last chance to top up their retirement accounts before they stop working.

5. Having emotional reactions to market volatility

The stock market tends to move in cycles, and that volatility can be alarming to many people. However, selling assets during a market drop or investing aggressively when one asset takes off can harm your long-term retirement plans. Financial advisors recommend that people stay calm instead of making quick decisions during challenging economic times.

6. Avoiding hard conversations with your aging parents

One of the biggest financial issues many people face in their 50s is caring for aging parents. Although having these conversations isn't pleasant, talking to your parents about their finances is important. For example, ask them whether they have long-term care insurance and determine whether or not you think they'll need to use an assisted living facility in the future. Knowing this ahead of time can help you understand whether or not you'll need to help financially with their care in the future.

Other common financial mistakes people in their 50s make

Some other common mistakes that people in their 50s make are carrying high-interest debt into retirement, underestimating how much money they'll need in retirement, and not researching potential health care costs. These mistakes can cut into cash flow in retirement and make it challenging to maintain your lifestyle during your golden years.

Bottom line

According to the AARP Financial Security Trends Survey, 42% of adults have less than $50,000 saved for retirement. That means for many people, your 50s are your last major opportunity to catch up on retirement savings and ensure you have enough invested to be able to stop working in your 60s. For that reason, try to avoid the financial mistakes mentioned above, and consult with a financial advisor if you need advice about how to make the most of retirement planning in your 50s.