20 Things You Should Be Doing In Your 50s To Prepare For Retirement
Your Future Self Will Thank You
Being in your 50s is like standing on the top of a mountain. You have your whole career behind you and retirement in your sights. You may be thinking that it's too early to start thinking about your twilight years, but this decade is integral for planning for them, not just from a financial perspective, but a health standpoint too. Here are 20 things you should be doing in your 50s to make sure you're retirement years are comfortable.
1. Live Like You're Already Retired
Test what it's like living on your retirement budget and try to get used to it. That's the only way you can be sure that it's sufficient, and living more frugally is a great way to have a little extra savings anyway.
2. Pay Off Your Debts
Focus on paying off all your high-interest debts so they don't eat away at your retirement savings. The worst offenders are credit cards and car loans.
3. Downsize
Consider downsizing to simplify your life and save money. This will also allow you to free up equity for your other goals, like traveling.
4. Take Care Of Your Health
To enjoy retirement, you have to be healthy. Start prioritizing your health as early as possible. This includes getting regular checkups, eating healthy, and getting plenty of exercise.
5. Review Your Investments
Rebalance your investment portfolio with a focus on more low-risk investments, like bonds, as opposed to high-growth, high-risk stocks. Your goal at this point should be to have a steady stream of modest income that's relatively safe from market volatility.
6. Pay Off Your Mortgage
Paying off your mortgage now will free you from having those monthly payments to make after your employment income stops. If you're able to get this out of the way, it will dramatically lower your retirement costs.
7. Regularly Review Your Plan
Always expect the unexpected. Review your retirement plan regularly, making adjustments for foreseeable problems, will make it easier to adapt when life throws its curveballs.
8. Max Out Your Retirement Contributions
Catch-up contributions, 401(k)s, and IRAs are all there to help you save for retirement. Now is the time to maximize your contributions, even if it means tightening your belt.
9. Create A Retirement Income Plan
Figure out where your income will come from in retirement. Whether it's pension payments, Social Security, your 401(k), or a combination of things, you need to make sure it's going to be enough.
10. Consider A Health Savings Account
A health savings account (HSA) is a tax-advantaged savings account that can be used for healthcare expenses. The money you contribute is tax-deductible, grows tax-free, can be withdrawn tax-free, and the money rolls over from year to year, so you never lose any of it.
11. Talk To A Financial Advisor
Not a very money-savvy person? You don't have to do it all by yourself. A professional can help you come up with the perfect, comprehensive plan that aligns with your goals.
12. Increase Your Emergency Fund
You should have an emergency fund at any age, but past retirement, it becomes even more important. Try to build it up as much as possible while you're still working, so you have a safety net for all of the unexpected things that might come your way in your twilight years.
13. Define Your Retirement Lifestyle
Start envisioning how you want your life to look in retirement, whether it's traveling or focusing on hobbies, family, or volunteering, and ask yourself how feasible it is. Having a clear vision helps your plan mentally and financially.
14. Strengthen Your Social Network
Remember that once you finish working, you won't have that workplace social network in place anymore. That's why it's so important to invest in your friendships and build community now so that it's there for you when you retire.
15. Update Your Estate Plan
It may seem early, but having a well-structured estate plan will protect your property, reduce taxes, and help ensure that your loved ones are taken care of. You never know what curveballs life will throw at you, so it's best to plan.
16. Review Your Insurance Coverage
Review your insurance coverage and consider upgrading to protect your assets. Consider supplemental health insurance to avoid unexpected costs later in life.
17. Make A Travel Bucket List
Making a travel bucket list will help you switch gears to start thinking about and getting excited about retirement. It will also help you start budgeting early.
18. Track Your Spending
The first step to creating an effective budget is to take stock of where your money is going. Start tracking your expenses so you can gauge what level of income would allow you to live comfortably.
19. Review Social Security Options
Review your Social Security strategy to determine the best age to start receiving it. Make sure to apply ahead of time and that you understand how it works and when you can expect your first check.
20. Estimate Your Retirement Expenses
After tracking your spending for a few weeks, you'll have a good estimate for your retirement expenses, and you can create a budget. Just remember to expect the unexpected and budget accordingly.
