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8 Retirement Planning Moves to Make in Your Fifties
Mar 04, 2021
We always say that retirement planning should begin as soon as your career does, and for most of us that means in our early- to mid-twenties. But because getting started in life can be challenging, many people don’t really start to consider retirement until their thirties, forties, or even fifties.
Either way, your retirement planning should be kicking into high gear once you reach age 50. Here are eight things you definitely need to consider during this decade.
Increase your savings rate.
A good target goal for retirement savings is to stash 20 percent of your income from each paycheck. But if you can’t meet that goal, get as close as you can.
Take advantage of matching contributions.
Contribute at least the matching amount from your employer, if they offer matching contributions to retirement accounts.
Make catch-up contributions.
If you’re maxing out your contributions each year, remember that those over age 50 can make additional contributions to retirement accounts while enjoying the same tax advantages. This year, you can contribute an extra $6,500 to qualified retirement accounts like a 401(k), and an extra $1,000 to IRAs.
Consider whether paying off your mortgage is the best plan.
Many of us dream of living debt-free in retirement and living without a mortgage is the epitome of that dream. But with mortgage rates so low these days, contributing extra funds to a retirement account or other savings vehicle might actually be the better plan.
Pay off credit card debt.
If you’re doing to tackle debt, credit cards should be your prime target. You’ll waste a lot more money on these high-interest debts than you would a mortgage.
Consider a health savings account.
If you’re eligible for a health savings account, you can enjoy certain tax advantages while saving money for qualified healthcare expenses. Money that is not used each year rolls over to the next year, and even into retirement when you can use the money for Medicare premiums, medications, and more.
Consider long-term care insurance.
Long-term care in a nursing facility, or even nursing care at home, can quickly deplete retirement savings. With premiums lower when you establish a policy in your fifties, now is the time to consider whether you need such a plan.
Meet with us to discuss these issues, and more.
We can calculate your expected retirement income, compare with your retirement budget, help you set a target date for retirement, and make other important decisions that will affect your life in the future.
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