Re-evaluate finances at 50
How to proceed depends on where you are now
When turning 50, it makes sense to re-evaluate your finances and retirement plan to see if you’re on track, now that retirement is probably 10 to 20 years away.
Here are some issues to think about:
- Prioritize your debt and start paying off your highest-interest obligations first. If interest rates are low, it’s smart to evaluate whether you would benefit more from paying off debt or putting your additional payment toward retirement savings.
- Get a hold of your spending – knowing what your expenses are can help you decide how much income you’ll need in retirement to maintain the lifestyle you are hoping for. Some people are surprised by how much they spend each month. Getting a handle on it now can help you create more room for saving.
- Take time to review your Social Security statement. Knowing what to expect in terms of Social Security benefits helps you figure out how much retirement savings income you’ll need to supplement those benefits.
- Amp up your savings – even if you haven’t saved much yet, it’s not too late to start. Take advantage of the 401(k) plan your employer offers, if there is one, and get the employer match if one is available. This is free money to you! And there are catch-up provisions for those over 50 that allow you to increase your contribution.
- Consider long-term care insurance. Many retirees will need some sort of long-term care at some point. Even those with substantial savings can find themselves running out of money if significant long-term care is needed. Considering it in your 50s may help you get better pricing for these plans
Sonny Gaby is a Financial Advisor in the Everence Michiana office on North Main Street in Goshen, Indiana.