The American Dream should include preparing for retirement in your 50’s. All the hard work you’ve invested in becomes a reality with retirement closer than ever before. However, you may be wondering if you’re fully prepared for your future. It’s not uncommon to have these doubts. The truth is, a successful retirement is achievable even if you’ve neglected preparing for it.
Life comes at us fast and we tend to put off tasks for a later date. Regardless of your situation, it’s time to review what you can do to prepare for a successful retirement. Here are 6 tips you should consider for financial success.
1. Define Your Retirement Milestones
You know the old saying, you can’t eat an elephant in one bite? The same applies to your retirement. You have to take small bites toward achieving something great. Defining these retirement milestones will help you stay on track.
There are several questions you should ask yourself. For example, will you work part-time? How will you handle expenses? What about medical bills? Do you plan to travel? All of these questions and more are essential to how you will budget and calculate your finances. Remember to set the bar where you deserve. If you feel like you need assistance, check out a financial advisor to help guide you to your retirement.
2. Assess Your Responsibilities
Assessing your responsibilities will help you successfully reach your retirement milestones. So what does this look like? This means taking care of any obligations that may hinder you from saving for your retirement. If you have lingering debts such as loans or mortgages, or if you’re caring for a loved one or helping your adult children, try to make plans to solve those obstacles and mitigate the negative repercussions. It’s understandable that it takes time, but it will be worth it in the long run.
3. Ask Yourself the Hard Questions in Your 50s - “Do I Have Enough?”
A common concern among future retirees is wondering if they’ll have enough money to last. Successfully saving for retirement largely depends upon proper planning. Proper planning leads to your desired results. This is when your milestones come into play because you’ll know what to prepare for and what you want to accomplish.
Often, individuals may heavily rely upon their retirement strategies such as 401(k)’s, an IRA, etc. These are great strategies to take the income you need, but you want to be sure it can sustain you for what you envision long term. If you’re fortunate enough to retire at 55+, you’ll need to financially plan for the rest of your life. The real answer to this question is that one size doesn’t fit all. So, make sure you’re aware of your desired results and strategize around them.
4. Make the Most of Your Benefits and Investments
Depending on your situation you probably have a retirement account designed to help your money grow. If you’ve placed your money in a 401(k), 403(b), a traditional or Roth IRA, or any other investment strategy, you’re on the right track. It’s also good to consult with a financial advisor to help you plan and secure your assets.
There are certain benefits that come with being in your 50’s. For example, you can maximize the most out of your 401(k). According to smartasset.com employees can normally contribute $19,500 per year to their retirement plan. If you’re over 50, you can contribute up to $6,500 more. If you have the opportunity to max out your 401(k), you should look into doing so. Make sure to check with your company to see if they match 401(k) donations. If they are willing to match what you can put in, then that’s like free money.
5. Evaluate the Benefits of Working Longer
Outside of your salary and portfolio, you should consider another stream of income. That may mean working part-time somewhere. You may be rolling your eyes at the idea of adding more to your plate, but there could be a great benefit in working. A Forbes article included an Oregon Study, suggesting that, “people who worked longer, lived longer. So if you work longer, it can be good for your health.”
The longer you work the more you can put into your employer-sponsored retirement plans or IRAs. If you work into your late 60s, you can accrue higher Social Security benefits as well.
Of course, you’d have to make your own decision if you want to work that long, but there are great rewards if you choose to do so.
When it comes to planning for your future beyond investing, you want to consider your taxes. Remember, taxes don’t stop coming just because you chose to retire. Depending on your retirement funds, you’ll need to think about which taxes you’ll pay. By considering your taxes, it will help you make the best decision to protect your retirement nest egg.
6. Anticipate Financial Stresses
Remember how we said life happens? There’s no way to expect the unexpected, so it’s important that you have a health savings account. The number one rule to remember when preparing for retirement is security over your nest egg.
Make an account that will protect your assets instead of depleting everything you’ve saved. You won’t be able to pick and choose when something happens, but you can create a safety net just in case something does occur. It’s important to include future medical costs and purchasing insurance to cover any unexpected losses.
The Bottom Line:
Building your nest egg requires financial accountability, diligent planning, and a positive mindset. Make an effort to live within your means and create other streams of income. Consider all factors so that you are fully prepared for a successful retirement. You’re already on the right track to a strong financial future. Continue to stay the course and you should be there in no time.
Ty J. Young Wealth Management
Ty J. Young Wealth Management
Over the last 20+ years, Ty J. Young Wealth Management has built custom investment strategies for over 7,000 clients and accrued $850m in assets under management.