Five Tips for Starting Retirement Planning in Your 50s
When it comes to retirement planning, many Americans find themselves underprepared. A majority of baby boomers (born between 1946 and 1964) and Generation X’ers (born between 1965 and 1978) often end up without retirement savings or don’t have realistic expectations about post-retirement costs. According to the Insured Retirement Institute, only 25 percent of boomers are confident of having sufficient savings in retirement. If you are in your 50s and nearing retirement without substantial savings or a plan, don’t despair -- it is never too late to start planning.
Posted on July 8, 2022
Although every working professional should contribute towards retirement from their early days, for various reasons they often delay the process. If you are nearing your 50s without a post-retirement plan and see yourself working for another 10 to 15 years, this is an opportunity to plan judiciously and save for your retirement right away.
Here are five strategic steps for achieving the best retirement plan:
1. Set Specific and Practical Goals
Proper retirement planning begins with setting specific goals. Calculate your current income, total savings, and ongoing investments to understand how much you could save, and be sure to set realistic goals.
While providing for emergency expenses and paying off a mortgage can be your short-term and intermediate goals, saving up for retirement should be your long-term goal. An annual financial review is helpful in evaluating your past goals and understanding your earnings as well as liabilities.
2. Plan a Realistic Budget Focusing on Retirement
Review your monthly and yearly expenses and list the factors that are likely to remain constant for the next few years. Now allocate funds to each category in a way that will allow you to save more for your retirement.
According to financial experts, if you are saving for retirement after 50, it is best to contribute 30 percent of your salary towards this end. If you find that goal difficult to meet, look at your budget list and reduce optional expenses.
3. Pay Off Debts
Paying off debts early will help you meet your retirement budgets and ease the financial burden. According to an AARP report, 44 percent of Americans continue to pay for their home after they retire.
Clearing off outstanding debts, credit card bills, loans, and mortgages will make it much easier to prioritize retirement funds.
FREE WEBINAR
5 Things to Know About
Estate Planning
When You Turn Sixty-Five
4. Invest in Retirement Plans
401(k)s, 403(b)s and IRAs are some of the retirement plans available in the U.S. While 401(k)s are one of the most popular plans, not all companies offer them and those that do have their own, often restrictive, investment rules. Then there are two types of IRAs: traditional and Roth IRAs.
To make the best choice among the many retirement plan options, it is essential to have a thorough understanding of IRA vs 401(k), Roth IRA vs 401(k) and other investment alternatives, as well as contribution limits.
5. Diversify Your Investments
Investment diversification will help keep you on a firm financial footing. Do not stash all your money in banks; instead, create an investment portfolio and explore your options.
It is important to diversify and distribute your money among multiple sectors. Considering the volatility of markets, diversification of your investment portfolio safeguards your capital and helps it grow.
It’s Time to Step Up a Gear
A concrete retirement plan with emphasis on savings is essential to ensure a comfortable and healthy post-retirement life. Saving for your retirement is the first priority and the sooner you start, the better your chances of achieving your retirement goals.
More from our blog…
Could Medicaid Payback Rules Come to an End?
Amid recent reports from such prominent news outlets as The New York Times and Associated Press about the negative impact of Medicaid estate recovery on families, the idea of [...]
Seniors and Caregivers: Establish an Emergency Action Plan
For seniors and their caregivers, having a plan in place should an emergency strike can provide some peace of mind in a turbulent world. A [...]
5 Ways to Update Your Estate Plan After a “Gray” Divorce
Deciding to end a marriage as an older adult is increasingly common. If your marriage ended later in life, you could be part of the [...]
Survey Highlights High Costs of Long-Term Care in 2023
You may not foresee ever needing assistance with your day-to-day life. However, research shows that seven in 10 adults aged 65 and older will require [...]
Recent blog posts
FREE WEBINAR
5 Things to Know About
Estate Planning
When You Turn Sixty-Five