Retirement becomes a bit more real when you enter your 50s than it did in any previous decade. As you get closer to your retirement age, it is natural to experience some anxiety about Social Security, investment portfolios, and family assets. Some people only start thinking about retirement investment planning in their 50s.
Whether you’re fine-tuning a plan you made in the past or are just getting started with savings, your 50s are a pivotal decade in determining your financial solvency in retirement. This is especially true for women who, more than in any other generation, are key income earners for the family.
Work Toward Becoming Debt-Free
According to CNBC, debt-free living is an important aspect of retirement investment planning in your 50s. As you get closer to retirement age, you should be paying down credit cards and other forms of debt so they won’t be an issue once you retire.
Meet with a Financial Adviser
A professional in the financial industry can evaluate your retirement investment portfolio and make suggestions for saving more money over the next decade or so. He or she can also provide valuable advice on savings plans, and will be able to paint an accurate picture of your financial outlook in retirement.
Max Out 401(k) Contributions
You might have already done this, but it’s important to feed as much money as possible into your retirement plan. As you eliminate debts, your expenses decrease considerably, and you can funnel all the excess funds into your future.
This is especially true for women in their 50s who might retire earlier than men in the same situation. Women live longer than men and still earn statistically less than their male colleagues, so savings are essential.
Initiate 401(k) Rollovers
Women who have switched jobs numerous times over the years often maintain several retirement accounts through those various employers. When you hit your 50s, it’s time to consolidate those accounts and roll them all into one plan. It’s easier to manage this way, and you’ll have a more accurate view of your total savings.
If you’re a “late bloomer” starting to plan for your retirement in your 50s, Forbes recommends investing conservatively with your 401(k). This means sticking primarily with bonds and other investments in which you are unlikely to lose any of your principal investment.
Factor in Family Changes and Expenses
As you enter your 50s, you might be paying for your kids’ college educations, re-establishing yourself after a divorce, or providing financially and/or physically for an aging parent. All of these things can put a strain on retirement planning and divert funds that you might otherwise have put in savings.
Don’t just throw money at a problem as a solution. Instead, look for ways to save money while still giving your family what they need. For example, kids preparing for higher education will save considerable cash by living at home the first two years and attending community college.
Women who have recently divorced and are entering the work force for the first time in years are particularly vulnerable. You might receive part of the retirement plan you and your spouse built together, but it is more important than ever to focus on feeding money into your own 401(k).
Major lifestyle and familial changes are an excellent reason to visit that financial adviser. He or she can review your situation and give you your options so you don’t feel overwhelmed.
Pinpoint a Retirement Date
The idea of retirement in your 30s and 40s might have seemed amorphous, a pie-in-the-sky event that might never come to pass. In your 50s, however, retirement solidifies in your mind, and it’s time to pick a date on which you would like to retire.
You might not actually achieve retirement by that date, but choosing an ideal age will give you something to work toward. If you’re 50 now, for example, and you want to retire at 65, you know you have 15 years to beef up your retirement portfolio and get yourself into a position where retirement is feasible.
Determine How Your Lifestyle Will Change
What will be different upon retirement from how you live now? Will your expenses increase or decrease? Will you move, sell your car, start a part-time business? Again, you won’t know until retirement actually arrives, but it helps to plan ahead.
Prepare for Every Eventuality
Women are placed at a particular disadvantage when it comes to retirement planning in their 50s. They have reached an age where they are comfortable in their lifestyles and in their families, but it is important to realize that things change.
As mentioned above, women tend to outlive men, and many women work only part time or stay at home with their children.
If you are a married woman, it is important to sit down with your spouse and discuss the future and how you will live in retirement. What happens if your husband passes away first?
Retirement planning can cause anxiety in your 50s, but solid advice is your best ally against a shaky future. Know your income, assets, debts, expenses, and every other aspect of your finances, and read as much as you can about retirement investments and savings plans. The more you know, the better prepared you will be for life after retirement.