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Five Tips for Retirement Planning in Your 50s

How to Move Smoothly into Your Next Chapter of Life

Five Tips for Retirement Planning in Your 50s

Many people find that their 50s are an eventful decade, full of milestones like children leaving the nest and mortgage loan amounts finally dwindling to zero. It can also be the time in life when you find yourself earning more than ever, while also seeing your retirement looming close on the horizon.

All of these things make this decade of life a great time to make financial tweaks to ensure you’ll be on track for the retirement you’ve always dreamed of. Here are five tips to take in your 50s to help you achieve your retirement goals:

1.     Give Your Savings More Attention

Once you hit your fifties, it pays to boost your savings. That’s because the IRS allows you to take advantage of “catch-up” contributions to your tax-advantaged accounts. Even if you’ve already been maxing out your 401(k) contributions, you can contribute an additional $6,500 once you turn 50. You can also begin contributing an extra $1,000 per year to your Roth IRA.

If you’re interested in going above and beyond catch-up contributions, you may find benefits in a deferred annuity, too.

2.     Crush any Remaining ‘Bad’ Debt

If you reach your fifties and you’re still saddled with credit card debt, resolve to pay it down as quickly as possible. Mortgage debt and student loans provide some tax advantages, but there is no benefit whatsoever to credit card debt. This is especially true right now, as the average Annual Percentage Rate (APR) on today’s credit cards stands at a whopping 18 percent – the highest it’s been in more than ten years.

3.     Strategize How to Maximize Your Social Security Benefits

If you plan to continue working through your fifties and into your sixties, the prospect of Social Security benefits can seem far off. However, it’s important to get a plan in place now for how you can maximize your Social Security in retirement. The long and the short of it is that the longer you wait to begin collecting this benefit, the greater your lifetime benefit will be. You can read more about your benefit claiming options, as well as check out your earnings record through the Social Security Administration website.

4.     Expect the Unexpected

The most careful planning in the world can be upended by financial wild cards in retirement – unless you take the time to put strategies in place that will help you mitigate the impact of surprise expenses. Most especially, this includes planning for unforeseen medical expenses. According to Fidelity’s 2019 Health Care Price Check, the average 65-year-old couple retiring now can expect to pay upwards of $285,000 in health expenses during retirement. Concerningly, this does not include things like nursing home care or extended home care. So, it’s essential to consider how you’ll pay for your medical expenses without draining your retirement savings. As a pre-retiree in your 50s, there are two common strategies: long-term care insurance and Health Savings Accounts (HSAs). If you’re unsure which may be best for you, talk with a financial advisor for professional guidance.  

5.     Ensure You Won’t Outlive Your Savings

One of the biggest fears of retirees is that they’ll outlive their nest eggs. This can certainly happen without proper planning, but your 50s is a great time to get a secure strategy in place. You’ll need to keep two things in mind: creating a stable, lasting income and minimizing your tax liability. Your financial advisor can help you position your assets properly to make your money go further in retirement but, generally speaking, you’ll want to consider spreading your assets across a variety of accounts that you’ll use for different purposes. For example, you’ll want investments for continued growth, but also something like an annuity to provide stable income that is protected from market downturns.

Make Your 50s Count

Even if you’re planning to work for another decade or more, your 50s will be a consequential decade for your retirement planning. The moves you make now can position you for the retirement you deserve after so many years of hard work and diligent savings, so make sure to take full advantage of this decade of your life in order to set yourself up for a fulfilling and stress-free next chapter.


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