How to Catch Up on Retirement If You Started Late
Advanced, IRS-Approved Plays for Entrepreneurs 40+ to Reach $1 M–$3 M in 10–15 Years—Even From $0
A Quick Reality Check—And Why You Still Have Time
Most founders hit their 40s or 50s with strong cash flow but weak retirement balances—you kept reinvesting in the business, not your future self. The median 401(k) for 50-somethings is just $252,850 (Empower), hardly a cushion if you plan to step away within 10–15 years.
Yet the 2025 tax code is tailor-made for late starters who own pass-through businesses or S-Corps:
Contribution ceilings have never been higher. The 415(c) “annual additions” limit is now $70,000—40 % higher than five years ago. (TIAA)
Mega catch-ups kick in at age 60. Secure 2.0 lets 60- to 63-year-olds defer an extra $11,250 on top of normal 401(k) limits. (The US Sun)
Cash-balance pensions can shelter over $400k a year. Done right, you can redirect what you once wired to the IRS into your balance sheet.
Bottom line: A profitable business + aggressive tax engineering can still mint a seven-figure nest egg on a 10-year clock. The playbook below shows how.
1 │ Max Every 2025 Shelter (Slash $50k–$150k of Tax Each Year)
Rapid-Fire Example (Age 52 consultant, $800k profit)
Solo 401(k) employee + catch-up: $31,000
Solo 401(k) employer: $46,500
Cash Balance (age-52 max): ≈ $195,000
HSA family: $9,550
Total sheltered: $282,050 → $104,000+ tax avoided at 37 % federal.
2 │ Mega Backdoor Roth: Funnel Up to $81k/Year Into Lifetime-Tax-Free Growth
2.1 Prerequisites & Plan Design
Your 401(k) document must allow three things:
Voluntary after-tax contributions (distinct from Roth or pre-tax).
In-plan Roth rollovers or in-service distributions to a Roth IRA.
Immediate or at least quarterly processing of conversions (to stop growth from being taxed when moved).
Solo 401(k)s check all three boxes automatically when you adopt a modern prototype. For S-corp owners with a “big-plan” 401(k), ask your third-party administrator (TPA) to add an after-tax sub-account and automatic G-coded 1099-R service. (employeefiduciary.com)