When a 401(k) balance starts to matter more than a bragging point, people in their 50s start paying attention. This is the decade when retirement savings should be strongest and stocks highest.
According to Empower data, the average 401(k) balance for 50-year-olds is $635,320. This looks solid until you see the median balance of $253,454. The median is a better reflection of what a typical person in their 50s actually has because it is not pushed up by a few very large bills.
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People in their 50s are able to save more than younger workers. For 2026, the employee contribution limit for 401(k) plans is $24,500. Workers who have reached the age of 50 can contribute an additional $8,000 as a catch-up contribution. This means that someone in their 50s can contribute a total of $32,500 in 2026 if they take full advantage of both limits. Workers who are between the ages of 60 and 63 and whose plan allows it, can total $11,250 in catch-up contributions.
If you measure your progress with the average balance only, it may feel like you are doing well. But the median shows that many people are well below that average. And when you think about retirement costs, the median becomes even more important.
The average US family spends more than $78,000 a year, according to Bureau of Labor Statistics data released last month. A 401(k) balance of $253,454 would be gone in a few years without other sources of income. This is the reality for many people in their 50s who haven’t saved aggressively.
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So what can someone in their 50s do if they are below the median or feel behind?
For higher earners who have already reached annual contribution limits, some 401(k) plans offer a strategy called the mega backdoor Roth. This allows for extra after-tax contributions that can be rolled into a Roth account for tax-free growth. It’s not available in every plan, but if yours allows it, it could sock away thousands more each year—well beyond the $32,500 limit. It’s one of the few legal ways to avoid Roth IRA income limits and protect more money from future taxes.
Look beyond a 401(k) account. Some retirement investors are using fractional real estate investing through platforms like Arrived to build passive income from rental properties for as little as $100. That type of diversification helps to create another income that does not depend only on the return of the stock market.