How To Supercharge Your Savings in Your 40s & 50s

Maximizing Health Savings Accounts (HSAs)

Health savings accounts (HSAs) are the underdog of retirement savings vehicles, but they can help Gen Xers pull out a retirement win when used to their full potential. HSAs, a tax-advantaged savings account available to those in high-deductible health plans (HDHP), allow you to save pre-tax dollars for medical expenses. 

“HSAs have a triple tax benefit,” said Hilary Hendershott, CFP, president and chief advisor of Hendershott Wealth Management. “You get a deduction for the year you contribute, you can invest the account and have it grow tax-free, and withdrawals will be tax-free if used for qualified health expenses.” 

HSAs require some strategizing to maximize benefits. Start by matching employer contributions, so you’re never leaving free money on the table. 

You can also invest with the long term in mind. If you don’t need to use your HSA for qualified medical expenses in your working years, you can use the money to pay your Medicare premiums. Once you’re 65, you can also withdraw your money for non-medical expenses. These withdrawals are taxed as ordinary income like traditional IRA distributions. 

Roth IRA Conversions: A Strategic Move

Roth IRA contributions come from after-tax dollars, so withdrawals in retirement are tax-free after age 59½, as long as the account is at least five years old. Roth IRAs have no required minimum distribution (RMD) requirements until after the account owner’s death.

But there’s a catch. Roth IRAs are only available to people who earn less than a specific amount each year. The IRS sets new income limits each year.

Traditional IRA account holders may convert their traditional IRA to a Roth IRA. However, converting to a Roth means paying taxes on that amount in the year of the conversion. Still, the tax-free withdrawals in retirement may be a net positive for those expecting a higher tax bracket in retirement.  

Timing Is Key

“A Roth conversion can be a game-changer if you do it strategically,” said Stoy Hall, CFP, CEO and Founder, Black Mammoth. “The best time? When your income is lower than usual—maybe you took a sabbatical, switched jobs, or retired early but haven’t tapped into Social Security yet. Converting during a low-income year means paying taxes at a lower rate now rather than potentially higher rates in retirement.” 

“Another time to consider Roth conversions is if you want to leave tax-free assets to your heirs,” said Hendershott. “Occasionally clients state that they would prefer to pay taxes now and do a Roth conversion; paying the taxes on that asset now acts as a gift to their heirs that isn’t included in their annual gift tax exemption or lifetime gift exemption limits.” 

Financial advisors encourage anyone considering a conversion to stretch retirement income in retirement to speak with a professional. 

“Roth conversions can be powerful, but only if done with intent,” said Hall. “Don’t just do it because some TikTok financial guru told you to.”

Leveraging Technology and Financial Tools

In an age where most of us have a rectangle with internet capabilities no more than an arm’s reach away, tracking our progress toward retirement savings goals and investing is easier than ever—you just have to know where to look.

Leveraging technology to boost retirement savings may mean using a budgeting app to keep track of monthly spending, robo-advisors to invest, or the perfect app to create a financial plan and help you stick to it.

Retirement calculators: The T Rowe Price Retirement Income Calculator and MaxiFi Planner are retirement calculators that allow you to model various scenarios and change variables to see how they affect your plan. With this information, you can decide if you are on track for retirement or what you should change to reach your goals.

Budgeting: Applications like Honeydue or You Need A Budget (YNAB) can help you get back to basics. These tools help track expenses and identify savings opportunities.

Investing: Apps like Wealthfront, Acorns, Fidelity Go, and Betterment are some of the many apps that allow you to plan for and invest in your future from the comfort of your home, office, or favorite coffee shop. 

Additional Savings Strategies for Gen Xers

If you are one of many Gen Xers worried about their retirement savings, there are a few other strategies to consider in making the most of your retirement savings.

Don’t Forget To Diversify

Diversification reduces risk by spreading money over different financial instruments, industries, and asset classes. As you approach retirement, you will likely reallocate your retirement funds away from high-risk investments and ensure you do not have too much money in any one investment. 

Don’t Leave Money on the Table

Employer matches are what many financial professionals call “free money.” If your employer offers a matching contribution, usually a percentage of income, try contributing the amount needed to receive the entire match. 

Don’t Retire Just Because You Can

Many assume retirement means stopping work entirely at 65, but rethinking what retirement looks like can help alleviate some of the pressure. If you are in good health and are not quite financially prepared to retire, you can work a few additional years. This can give you more time to save and reduce the number of years you’ll need to draw from your retirement accounts.

Waiting until you turn 70 means you will receive maximum monthly Social Security payments. If you delay taking Social Security beyond your full retirement age (FRA), you could receive an extra 24% in benefits.

Don’t Let Extra Money Go To Waste

Automate your savings and investments so your extra dollars work for you without relying on self-discipline or constant decision-making. 

“The next time you get a raise, bonus, or unexpected windfall, automate all—or a portion of it—straight into savings or investments before it even hits your checking account,” said Hendershott. “This helps you avoid the sneaky trap of lifestyle creep, where higher earnings lead to higher spending instead of higher savings.”

The Bottom Line

“The best time to start was 20 years ago. The second-best time? Right now,” Hall said. “You’re not out of the game until you decide you are. Retirement isn’t an age—it’s a financial position. You want freedom? Make moves.”

If you’re in your 40s or 50s and you’re behind on your retirement savings, you can reach your goals with the right strategies. Start by maximizing catch-up contributions, choosing the right tax-advantaged account, considering Roth IRA conversions, and leveraging technology. 

Also consider consulting a financial advisor who can provide personalized insights into your situation.