401(k) Catch-Up Strategies If You Started Saving Late
If your 401(k) balance is lagging behind where it should be, you may feel discouraged or even a little panicked.
But the truth is, we believe there’s still time to course-correct – if you take action now.
According to the 2023 Protected Retirement Income and Planning (PRIP) study by the Alliance for Lifetime Income:
- 51% of consumers between 45 and 75 feel they do not have enough retirement savings to last their lifetime.
- 32% are not confident they will have enough money in retirement to cover basic monthly expenses.
- 44% are retired currently or retired previously and have gone back to work.¹
These stats reveal a sobering truth: Many people reach midlife without having saved enough.
But there’s also hope – and real strategies that can help you catch up.
Below are 7 smart 401(k) catch-up strategies designed to help late starters take back control of their financial future.
Whether you’re behind because of life circumstances or simply didn’t prioritize savings earlier, there are ways to make meaningful progress starting today.
Understand 401(k) Catch-Up Contributions
In our opinion, one of the most effective 401(k) strategies for those behind on their savings is to take advantage of catch-up contributions.
They help individuals contribute more so that they can “catch up” on their retirement savings.
Individuals 50 or older are eligible to make catch-up contributions.
The standard 401(k) contribution limit for 2025 is $23,500.
However, those 50+ are allowed to contribute an additional $7,500, bringing their contribution limit to $31,000.
In 2025, there is also a super catch-up contribution for those aged 60 – 63. If you fall in this age range, you may contribute an additional $11,250 instead of the $7,500 catch-up contribution that those 50 – 59 and 64 and older may contribute.
This means that rather than having a contribution limit of $23,500, those in this group can potentially contribute up to $34,750 in total to their 401(k) plan.
[Read More: 2025’s Super Catch-Up 401(k) Contribution: What You Need to Know]
Strategy 1: Max Out Employer Contributions First
As you work on boosting your retirement savings, prioritize contributing enough to your 401(k) to receive the full employer match.
This is like free money!
Consider this example: Your company matches 100% up to 6% of your pay. If you make $40,000 a year, you could put in $2,400 (or 6%) for the year, and your company would match this 100%.
This means you would get $2,400 of free money for your retirement.
Make it your goal to contribute at least enough to receive this free employer match.
Then, work toward contributing enough to meet the standard $23,500 limit.
Strategy 2: Increase Contributions
When you are trying to make up for lost time, the standard contribution limit most likely is not going to cut it.
We recommend you continually increase your contributions.
Apply every bit of extra money or raises to bump up contributions. Set calendar reminders to review and bump up percentages.
Keep increasing until you have reached catch-up contribution limits.
Strategy 3: Cut Expenses to Free Up Money
Cutting expenses today may better your tomorrow.
Identify non-essential spending that you can redirect to your 401(k) account.
For example, do you need a gym membership, or can you work out for free at home?
For some, it may mean bigger cuts than a gym membership. Some individuals may need to downsize their homes or trade in their vehicles.
Temporary lifestyle changes now may have long-term payoffs.
Another expense to consider is how much money you are spending on your children – especially your adult children.
Consider these key findings of the 2025 Savings.com report:
- The average monthly support per adult child is $1,474, approximately 6% higher than last year. (Note – this equates to almost $18,000 a year.)
- 83% of supporting parents contribute to their adult kids’ monthly groceries; 65% help with cell phones, and nearly half (46%) pay for vacations.²
Imagine if that $18,000 a year went into a 401(k) account where it could grow…
[Read More: More Parents Are Financially Supporting Adult Children: Why It’s a Problem]
Strategy 4: Use Windfalls Wisely
Today’s splurge may cost you in the future.
While it is tempting to splurge when you receive a bonus or tax refund, in our opinion it’s far wiser to put these windfalls directly into your 401(k).
The same idea applies to side gigs.
Instead of participating in lifestyle creep, take your “extra” money and set it aside for your retirement dreams.
If your plan allows, consider front-loading contributions early in the year.
Strategy 5: Combine with an IRA or Roth IRA
If you are doing a good job of making up for lost time by already maxing out your 401(k), contribute to a traditional or Roth IRA.
Consider spousal IRAs if one partner doesn’t have earned income – this lets you contribute on their behalf and potentially increases your total household retirement savings.
Combining 401(k) savings with an IRA can be a smart retirement strategy.
Strategy 6: Rebalance Your 401(k)
The investments you chose initially may not be the most effective ones for maximizing your 401(k) savings goal today, which is why we recommend you reassess and rebalance your investments – especially as you get closer to retirement.
As retirement nears, managing risk typically becomes even more critical, and increasing your bond holdings may be a smart move to help preserve your savings.
In volatile or down markets, rebalancing your 401(k) may help you stay within your risk level and protect against potential losses.
On the flip side, rebalancing may help you take advantage of opportunities for growth during good markets.
[Read More: One Move That May Improve Your 401(k) Returns in 2025]
Strategy 7: Get Professional Help
A fiduciary advisor can help you create a catch-up plan tailored to your situation.
Speaking to a professional may possibly help you avoid more saving mistakes and make the most of the years you have left to save.
401(k) Maneuver provides independent, professional account management with the goal to help employees, just like you, grow and protect their 401(k) accounts.
Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that are hurting your retirement account performance.
401(k) Maneuver allows you to go about your life doing what you love with confidence, knowing we are handling the changes for you.
Find out what 401(k) Maneuver may do for your retirement account balance. Click below to book a complimentary 15-minute 401(k) Strategy Session with one of our advisors today.
SOURCES
- https://www.foxbusiness.com/markets/inside-americas-retirement-income-crisis
- https://www.savings.com/insights/financial-support-for-adult-children-study
