Retirement Savers Who Max Out Catch-Up Contributions Can Still Fall $120,000 Short
PensionBee warns that late starters may need strategies beyond savings alone to minimize retirement shortfall
NEW YORK, March 11, 2026 (GLOBE NEWSWIRE) -- Americans who take full advantage of the IRS super catch-up provisions, which further expand 401(k) contribution limits for older Americans, may still retire $120,000 behind peers who started saving earlier, finds .
The analysis shows that a 50-year-old who maximizes could contribute over $505,500 out of pocket and still fall short of a $1 million nest egg by retirement. While catch-up and super catch-up limits may help those over 50 regain valuable ground, they alone cannot bridge the gap caused by a late start.
Is 50 too late to start saving for retirement?
PensionBee compared two retirement savers: one who began 401(k) contributions at age 35 and the other at age 50.
Both savers:
- Contributed for a 15 year period, though the earlier saver’s contributions remained invested for longer.
- Followed the same salary trajectory, beginning with an annual income of $72,020 at age 35, the 2026 average for that age group according to
- Contributed 10% of their salary, which grew 3.7% each year to illustrate inflation.
- Earned a 7% investment return, (net return: 6.15%).
Table 1: Why time in the market matters
| Contribution Schedule | Total Principal Contributed | Final Value Per $1 Contributed | Final Balance (Age 65) | ||||
| Early Starter | Contributed from ages 35 to 50 | $141,000 | $4.19 | $591,000 | |||
| Late Starter | Contributed from ages 50 to 65 | $243,200 | $1.71 | $439,200 | |||
Each dollar contributed at 35 grew to $4.19. Each dollar contributed at 50 grew to just $1.71.
Because the earlier starter’s contributions remain invested after age 50, the funds continue compounding for 15 additional years, dramatically increasing the value generated per dollar saved. They not only invest less but end up with more, despite not contributing a single additional penny after the age of 50.
The late starter faces a different scenario. At the same contribution rate and investment return, they would need to work nearly four additional years beyond age 65 for their balance to match the $591,000 pot of the early starter.
The limits of catch-up contributions:
Those who put off saving for retirement are not alone. Roughly U.S. households do not have a retirement account. Even among adults over 50, one in five have yet to begin saving, .
In 2026, Americans over the age of 50 can contribute up to $32,500 annually, with a temporary super catch-up provision allowing up to $35,750 per year between ages 60-63.
PensionBee conducted additional analysis to gauge whether the expanded catch-up contributions can help older Americans make up for lost time.
In this scenario:
- The younger saver invested 10% of their salary from age 35 until retirement, following the same contribution trajectory as above for 30 years.
- The older saver started at 50, maxing out 2026 401(k) catch-up and super catch-up contribution limits.
- Both savers earn a 7% investment return, (net return: 6.15%), and retire at age 65.
Table 2: Can catch-up contributions close a 15-year savings gap?
| Contribution Schedule | Total Principal Contributed | Final Value Per $1 Contributed | Final Balance (Age 65) | ||||
| Early Starter | Contributed for 30 years (from 35 to 65) | $384,300 | $2.62 | $1,007,400 | |||
| Late Sprinter | Contributed for 15 years (from 50 to 65) | $500,500 | $1.77 | $885,600 | |||
Despite a massive out-of-pocket contribution of $500,500—roughly $120,000 more than the younger saver—the late starter’s balance reaches only $885,600 by age 65, leaving them over $120,000 short of their proactive counterpart.
By contrast, the 35-year-old starter, saving consistently, invests just $384,300 and ends up with over $1 million, nearly tripling their principal. Relying solely on catch-up contributions, the 50-year-old starter struggles to double what they put in.
How to maximize your retirement after 50:
While catch-up contributions alone may not rescue late starters, the following strategies may help close the gap:
Choose a retirement-friendly state: Through a combination of tax perks, like tax-free Social Security benefits, and a low cost of living, some states are for retirees than others.
Maximize IRA contributions: For those who can afford it, maxing out an IRA along with a 401(k) can supplement savings. , those aged 50+ can contribute up to $8,600 annually ($7,500 base limit plus a $1,100 catch-up contribution).
Delay Social Security: Waiting to claim benefits is one of the most effective ways to boost retirement income. Monthly benefits increase by a each year you delay past retirement age, up until the age of 70.
“Catch-up contributions are valuable, but they are not a silver bullet,” said Romi Savova, Founder and CEO of PensionBee. “Late savers need a clear strategy beyond aggressive saving to get to where they want to be.”
About PensionBee
PensionBee (LON:PBEE; OTCQX:PBNYF) is a leading retirement savings provider, helping people easily consolidate, manage, and take control of their retirement savings. The company manages nearly $10 billion in assets and serves over 300,000 customers globally, with a focus on simplicity, transparency, and accessibility. PensionBee offers Traditional, Roth, SEP, and Safe Harbor IRAs with ETF-backed portfolios that include SPY and MDY from State Street Investment Management, one of the world’s largest asset managers. PensionBee is publicly traded on the London Stock Exchange (PBEE) with U.S. shares available on OTCQX (PBNYF).
Notes
The information provided in this announcement, including any projections for investment returns and future performance, is for informational and educational purposes only and should not be considered investment advice. Past performance is not indicative of future results. All investments carry risk, including the potential loss of principal. PensionBee is not liable for any losses or damages arising from the use of this information. Projections and forecasts are based on assumptions and current market conditions, which are subject to change.
PensionBee Inc. is registered with the Securities and Exchange Commission as an investment adviser. We do not provide in-person advice. PensionBee Inc (Delaware Registration Number SR20241105406 ) is located on 85 Broad Street, New York, New York, 10004.
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