Your 50s generally is a wake-up name: Retirement isn’t theoretical anymore. With the clock ticking, the selections you make now can dramatically have an effect on the life you lead later.
From maximizing your financial savings to reassessing your funding technique and planning for long-term care, listed here are 5 expert-approved strikes to safe your monetary future.
Key Takeaways
- Catch-up contributions and Roth conversions can supercharge your retirement accounts in your 50s, so it’s good to make the most of them in case you can.
- Don’t overlook to plan for long-term care as nicely; it’s a actuality for many retirees.
- Lastly, assume strategically about if you need to retire and what delaying might imply in your total plan.
1. Max Out Contributions and Discover Roth Conversions
Consider maximizing your retirement contributions and catch-up choices as “planting seeds in your monetary future,” says Mallon FitzPatrick, head of wealth planning at Robertson Stephens. In 2025, these 50 and older can contribute an additional $7,500 to a 401(okay) (along with the $23,500 restrict for everybody else). When you’re 60 to 63, some plans permit an extra $11,250 in case your employer permits it.
FitzPatrick additionally recommends contemplating Roth conversions in lower-income years as a result of they set up a tax-free revenue stream in retirement. Working with a very good monetary planner to tailor methods to your revenue bracket and deduction choices could be a good suggestion, too, particularly in case you’re a excessive earner, a enterprise proprietor, or itemizing deductions.
2. Make a Plan for Lengthy-term Care Earlier than It’s Pressing
About 70% of individuals over 65 will want some type of long-term care, and Medicare received’t cowl it. FitzPatrick recommends beginning in your 50s by evaluating hybrid insurance policies, self-insurance methods, and the potential use of dwelling fairness.
Hybrid insurance policies, for instance, can mix medical insurance with long-term care advantages, providing some aid in case you want long-term care, whereas dwelling fairness conversion mortgages, the most typical kind of reverse mortgage, will help these 62 and older faucet into funds for residing bills.
“Planning for long-term care isn’t simply an expense; it’s peace of thoughts for future challenges,” FitzPatrick says. “It’s not solely about funding but additionally the mannequin of care and who will handle it.”
3. Get Strategic About Social Safety Timing
“Selecting when to assert Social Safety is like orchestrating a monetary symphony,” FitzPatrick says. Claiming early reduces month-to-month advantages, whereas delaying to age 70 will increase them considerably.
Married {couples} can optimize their advantages by having the upper earner delay to spice up each their very own and the survivor’s advantages. The Social Safety Administration has sources and calculators that will help you plan. And in case you’re nonetheless having bother figuring out what’s greatest for you, a breakeven evaluation with a monetary advisor will help.
4. Reassess Your Asset Allocation With out Getting Too Conservative
“While you enter your 50s, this can be a nice time to reassess each how a lot you’re saving for retirement and your total asset allocation,” says Carla Adams, founding father of Ametrine Wealth.
She recommends decreasing inventory publicity if it’s overly aggressive (e.g., 80% or extra in equities) however warns towards going too conservative. “Your true time horizon will not be your desired retirement age however your lifespan,” she says. As extra individuals stay into their 90s, this implies contemplating a plan that takes into consideration 30 or extra years in retirement.
Goal-date funds are one simple technique to handle this, however Adams suggests selecting one with a later retirement date if you wish to keep extra aggressive.
5. Don’t Rush Into Retirement—Delaying Can Be a Energy Transfer
“Beware the temptation to leap into retirement too quickly,” FitzPatrick says. Even a average delay can prolong your financial savings, protect medical insurance, and increase your Social Safety advantages. The truth is, a 2018 examine by the Nationwide Bureau of Financial Analysis discovered {that a} 66-year-old employee’s retirement revenue can rise by practically 8% in the event that they work one 12 months longer and wait an additional 12 months to assert Social Safety, thanks largely to the rise in advantages.
For these not desirous to proceed working full-time, exploring part-time roles or transitioning to a much less demanding but fulfilling profession generally is a viable various, FitzPatrick says.
The Backside Line
Your 50s are a time to take your retirement plan severely. That doesn’t simply imply saving extra—it means pondering holistically about healthcare, tax effectivity, revenue timing, asset allocation, and your life-style selections. With the suitable technique and some key changes, you possibly can nonetheless make this decade your strongest but for constructing the retirement you need.
