I Asked ChatGPT To Come Up With the Best 401(k) Plan for My 50s — Here’s What It Said

Core Insights - Retirement planning becomes critical in one's 50s, with a focus on maximizing 401(k) contributions and making strategic investment choices [1] Contribution Strategies - Maximize contributions, including catch-up contributions, with a total limit of $30,500 for 2025, combining regular contributions of $23,000 and catch-up contributions of $7,500 [2] - If unable to reach the maximum, aim for at least 15% to 20% of income, increasing contributions by 1% every six months until the target is met [3] Investment Allocation - Shift to a balanced portfolio, recommending 60% to 70% in stocks and 30% to 40% in bonds or stable value funds, with specific allocations of 40% to 50% in U.S. large cap stocks, 10% to 20% in international stocks, and 5% to 10% in small or mid-cap stocks [4] - This balanced approach aims to provide growth while mitigating risks associated with market volatility as retirement approaches [5] Simplified Investment Options - Consider using a target-date fund set for 2035 or 2040 for those who find portfolio management overwhelming, as these funds automatically adjust allocations over time [6] Tax Strategies - Emphasize the importance of tax diversification by adding Roth 401(k) contributions if available, enhancing tax flexibility in retirement planning [7]