Five Important Financial Moves to Make at Age 50

When you’re young, you’ve got a lot of advantages. For one thing, you’ve got time on your side. You could be 30 years or more away from retirement, which means that any bumps in the road that you might experience may be inconsequential once you’ve reached retirement. But as you get older, time gets tighter, and your margin for error starts to go way down.

With that in mind, if you’re over the age of 50, here are a few things that you should take care of in short order.

1. Have a Financial Plan in Place

First, make sure your financial plan is in place. Age 50 is an ideal age to look at where you are, and to figure out where you need to be. Have any of your goals changed over the last 20 years? Are you making more money now than you thought you would?  Or less? Maybe you’ve got grandchildren now, or maybe your own kids have moved somewhere and you’d like to be closer to them. Whatever your situation, your financial plan should reflect your most recent goals. Right now is a great time to determine if you need to make any adjustments.

2. Take Care of Your Parents (if possible)

Next, if you’re fortunate enough to still have your parents in the picture, you should make sure they’re in good financial shape. If they’ve already made plans for themselves well in advance, that’s wonderful. If not, it’s a good idea to sit down with them and make sure they have something more concrete in place.

3. Think About Your Estate

Third, you should start thinking about your own estate planning. At age 50, if you haven’t checked it for a while, it’s very likely that your beneficiary designations need to be updated. Are your retirement benefits, life insurance, investment accounts and other assets all going where you want them to go? And if you’re divorced or remarried, you should check that your ex-spouse is not receiving anything you don’t want them to, like an old 401(k) that you never rolled over.

4. Take Advantage of Catch-Up Provisions

Fourth – and this is a big one – you need to be sure you’re taking advantage of the “catch-up” provisions for retirement plans.  The IRS says that once you reach age 50, you can contribute more to your company retirement plan and to your IRAs. Those age 50 and older can make an extra $6,500 per year in catch-up contributions to their 401(k), 403(b), 457 or SARSEP plans. In addition to that, you can also make an extra $1,000 in catch-up contributions to your Traditional or Roth IRA. These extra amounts can really add up between now and when you retire.

5. Tackle Any Debt

Finally, you should tackle any debt issues you might have.  When you were younger, you may have used debt to your advantage to accumulate certain things or to free up cash for other investments. But now, it may be a good idea to work on paying it down – at least those debts with higher-than-average interest rates. This could potentially take a lot of pressure off your retirement savings once you’re no longer getting a steady paycheck.

All of this might seem like a lot of work, but with some guidance and advice, from your financial advisor, it’ll be a lot easier.  We do this every single day for our clients. How can we help you the most? Just give us a call.