When you hit your 50s, you are in your peak earning years and getting close to life beyond work. As you think about the future, do you have a vision and, more importantly, a plan for how to achieve the retirement life you want? You want to make sure that you have adequate resources to support your future lifestyle. Why not use the years of work left to focus on building your retirement security.
Here are five financial moves that will place you in good stead for your beyond work lifestyle:
Make a Retirement Plan
Start by mapping out a strategy. Collect and examine your financial records — your savings, investments and other assets as well as your debts and expenses. Using a retirement calculator, project a budget for expenses – how much will it cost to support your life beyond work. Online retirement calculators can help you estimate the monthly or annual income you’ll receive from savings and other sources.
Is there a gap between what you will need and what you have? If so, it's time to develop a plan for increasing your savings and investments. Consider meeting with your CPA or financial advisor to get some additional advice.
Simplify and Spend Less
Reducing spending is the easiest way to save more. Living on less lets you track where your money goes. It can serve as a reality check on how much you will actually need in retirement. Look at it as a trial run on your life beyond work.
Boost Your Savings
Your 50s offer a good chance to catch up on saving. The chances are that your children are no longer dependent and that monthly expenses are at a historical low. The best use of that extra cash is to ramp up savings. Set a goal for a percentage of your income - say 20% - and gradually increase each month until you hit the target.
Take advantage of any employer retirement accounts. Maximize your level of contribution, including the “catch up” contributions available to those 50 years and older.
Pay off Your Debt.
After you retire, any lingering interest payments on debt can reduce your limited income and make it difficult to pay off loan balances. Now, in your highest earning years, is the time to aggressively eliminate non-mortgage debt, from credit card balances to auto loans and other debts.
Consider Long-term Care Insurance
By the time you are in your 50s, you should decide whether you are going to buy long-term care insurance. If you wait much longer, you might find the premiums to be unaffordable, and you could develop health problems that would disqualify you from getting coverage.
Charles P Myrick CPA offers tax preparation for individuals using a process that combines smart, personalized planning with annual tax preparation and filing. Our job is to help you know about all the available tax opportunities that meet your individual needs and circumstances. We work closely with tax lawyers, and investment advisors to ensure that all the details are legally sound, technically accurate, and working to your maximum benefit. Contact us to learn more: (202) 789-8898