It’s never too late to start building wealth—just look at Warren Buffett’s journey after 50!
- Warren Buffett’s wealth primarily accumulated after age 50, highlighting patience in investing.
- Compounding growth can significantly enhance wealth over the long term, even for late starters.
- Individuals aged 50+ can make extra retirement contributions, increasing their savings potential.
- Small financial improvements, like maximizing employer 401(k) matches and setting up automatic savings, can yield big results.
- A 7% annual return on monthly investments of $500 could grow to about $158,481 in 15 years.
Warren Buffett became one of the wealthiest people in the world thanks to long-term investments. That required patience.
Approximately 99% of Buffett’s wealth came after his 50th birthday. His experience illustrates that it’s never too late to save for retirement, and that compounding growth accelerates wealth in the long run. Everyday investors may not be working with the same amount of funds as Buffett, but an additional $8,000 catch-up contribution to a retirement savings account can be a good starting point for late starters who want to build their nest eggs.
Buffett’s money came late
It’s widely estimated that 99% of Buffett’s money came after he turned 50. That’s in large part due to compound interest. While building a portfolio from scratch can be the hard part, long-term asset returns can eventually outpace how much of your salary you’re putting into your portfolio each year.
That’s often the investing strategy of people who accumulate long-term wealth: Paychecks fund the initial buildout, and asset appreciation creates more financial flexibility in the future.
What 15 years of saving can do
It’s never too late to start building wealth, and some people may be underestimating how much progress they can make within the next 15 years. Assuming a reasonable 7% annualized return and $500 in monthly investments, your net worth can grow to about $158,481, before fees and taxes.
Taxes take less of a chunk out of your portfolio if you hold assets over the long run. Long-term capital gains tax rates are more generous than ordinary income tax rates, and you can sell stocks and funds when you are retired, which can result in more favorable tax rates.
While your portfolio’s growth won’t be as noticeable in the first month or year, the compounding can put you in a better financial position by the time you are ready to retire.
Extra room for savers 50 and older
If you are 50 years or older, you have an advantage when it comes to saving for retirement. At that age, you can start making catch-up contributions. In 2026, people aged 50 and older can contribute an extra $8,000 to a 401(k) or similar plan and an extra $1,100 into an individual retirement account (IRA) on top of the typical contributions the IRS allows each year.
People who are 60 to 63 years old have an additional perk. They can make a super catch-up contribution, which raises the regular catch-up contribution from $8,000 to $11,250 in 2026. The super catch-up contribution is currently only for 401(k)s and similar plans — not IRAs.
These retirement plans offer tax advantages that let you keep more of your money. Traditional retirement plans let you reduce your tax bill upfront and pay taxes on withdrawals, while Roth accounts require upfront taxes, but you won’t pay taxes on any withdrawals.
3 moves to make this month
You don’t have to make dramatic moves to put your finances in a better spot. Small, incremental improvements that build on each other can add up, especially if you have a long-term horizon. Here are three moves you can make now:
- Make sure you claim the full employer match for your 401(k) plan. Many employers offer to match contributions to 401(k)s and similar accounts up to a certain amount. Even if you cannot max out your retirement plan, it’s a good idea to at least contribute enough so that you can claim the full match and aren’t leaving money on the table.
- Raise your savings rate by at least 1%. For instance, if you save 10% of your money each year, try to raise that number to 11%. Getting rid of an unused subscription and reviewing recent credit card statements for where to make cuts may be enough to save an extra 1% of your paycheck.
- Set up automatic transfers. This way, you won’t see some of the money that lands in your checking account and be tempted to spend it. These transfers can help ensure you are gradually growing your portfolio (and make it easier to spend your remaining paycheck guilt-free).