We consider a quantum Otto cycle for a time-dependent harmonic oscillator coupled to a squeezed thermal reservoir. We show that the efficiency at maximum power increases with the degree of squeezing, surpassing the standard Carnot limit and approaching unity exponentially for large squeezing parameters. We further propose an experimental scheme to implement such a model system by using a single trapped ion in a linear Paul trap with special geometry. Our analytical investigations are supported by Monte Carlo simulations that demonstrate the feasibility of our proposal. For realistic trap parameters, an increase of the efficiency at maximum power of up to a factor of 4 is reached, largely exceeding the Carnot bound.