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Four Things You Must Do at Age 50

One of the nice things about being young is that you have a lot of margin for error.  Usually any minor mistakes you make can be solved or at least lessened by the passage of time. Once you get older, though, time gets tighter, and that margin for error starts to get really small.  Suddenly the outcome of your decisions starts to matter.  This is especially true when it comes to your finances.  If you’re over the age of 50, here are four things we think you need to take care of, sooner rather than later.

1. Make sure you’re on track to retire on schedule

First thing to do is to make sure you’re on track to retire on schedule.  At 50 years old, you’re in an ideal spot to determine where you are and where you need to be.  Ask yourself how your goals may have changed over the past 20 years.  Are you making more money right now than you thought you would be, or less?  What about your kids, or your grandkids, if you have them?  Your financial plan should reflect whatever your most recent and most pressing goals are.  If you need to make any adjustments, now is a great time to do that.

2. Check the financial health of your parents

Next thing is to check on the financial health of your parents.  If you’re fortunate enough to still have them around, you may want to make sure they’re still able to live comfortably, and that their own financial plan is meeting their objectives.  As our parents get older, their decision-making sometimes gets a little cloudy, and it may be up to you and your siblings to help keep them as grounded as possible.  This can sometimes be a bit tricky, so make sure you tread carefully here.  But it’s important that you at least let them know you’re looking out for them.

3. Think about your own estate plan

The third thing to think about is your own estate plan.  It’s likely by now that your beneficiary designations need to be updated, so check your retirement accounts, life insurance and other assets to see that they’re all going where you want them to go.  Maybe you’ve remarried.  If so, check to see that your ex-spouse is only getting what you want them to, if anything at all.

4. Take advantage of the “catch-up” provisions

And finally, make sure you’re taking advantage of the “catch-up” provisions.  IRS regulations allow those age 50 and older to contribute an extra $6,500 per year to their 401(k), 403(b), 457 or SARSEP plans.  Not only that, but you can also put an extra $1,000 in catch-up contributions to your Traditional or Roth IRA. Over the course of ten or 15 years, those extra amounts can really add up.

All of this might seem like a lot of work, but it really doesn’t have to be.  We plan for stuff like this every day, so if you need some additional guidance or suggestions, just give us a call.  We’re here to help.


Important Information:

The information provided should not be considered specific tax, legal, or investment advice and is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.

You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed. No client or prospective client should assume that the presentation (or any component thereof) serves as the receipt of, or a substitute for, personalized advice from Lucia Capital Group or from any other investment professional.

IRA withdrawals will be taxed at ordinary income rates. Withdrawals prior to age 59½ may also be subject to a 10% penalty tax.

Roth IRA distributions of principal from a Roth IRA are tax-free; however, any earnings will be taxed at ordinary income rates and a 10% penalty tax will apply if withdrawn prior to age 59½ or within five years of the date the Roth IRA was established, whichever is longer.

Insurance product guarantees are subject to the claims-paying ability of the issuing insurance company and are subject to their terms and conditions. Insurance products offered through Lucia Securities, LLC (CA Insurance Lic. #0H40817).

Rick Plum is a registered representative of, and offers securities through, Lucia Securities, LLC (“LSL”), a registered broker/dealer, member FINRA/SIPC. Advisory services offered through Lucia Capital Group, a registered investment advisor, and holding company for its affiliated broker/dealer LSL. Registration with the SEC does not imply a certain level of skill or training.

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