Life After 50: 7 Steps to Retirement Readiness
Fifty can be a pivotal age when it comes to retirement planning. You’re likely less than 20 years away from exiting the workforce, so you’re saving money and getting serious about your finances. At the same time, you may also be caring for, or providing financial assistance to, aging parents, your children, and/or grandchildren, at the same time. But it’s also time to think about how you want to build out your golden years — including the hobbies you hope to pursue — and how you’re going to factor those costs into your new lifestyle. Luckily, at 50 there is still time to make changes to your savings strategies to make sure your goals are met.
Read on for seven ways to improve your retirement readiness here and now.
- Focus on your spending. Where does your money go, and how will that change during retirement? What hobbies or travel plans do you have for retirement that aren’t part of your current spend? Are you saving enough now? Budgeting is a common challenge for many new retirees. If you can implement firmer control of your spending habits while you’re still working, you’ll free up resources for later when you need them most.
- Get serious about your health. What good is retirement planning if you can’t enjoy its benefits later on? Taking care of yourself can pay off later in terms of your overall health — and increases your odds of living a longer, more active life. Get proactive and make an appointment with your doctor about steps you can take today for a healthier tomorrow.
- Update your estate plan. At 50, estate planning might not feel urgent, but the process involves nearly every aspect of your financial life — a review of your assets, insurance policies, healthcare instructions and more. Knowledge is power, so take the time to educate yourself on the latest thinking and financial products sooner rather than later.
- Insure what’s necessary — and get rid of the rest. Make sure you have your healthcare covered, and drop any unnecessary term life or other policies that have outlived their purpose. The money you save now on unnecessary insurance premiums could work a lot harder for you in retirement.
- Have a plan in place for your parents as well as your children. As the average lifespan grows longer, at some point you may find yourself juggling the needs of retired senior family members and your offspring. For many retirees, their home — and the home equity they’ve built up — can be their most valuable asset, so it’s wise to educate yourself about how that equity can be used in retirement. For example, if your parents are homeowners age 62 or older, a reverse mortgage can help provide them with greater financial flexibility, while giving you peace of mind that their financial needs are covered.
- Max out your current retirement contributions. Maximizing your contributions is one of the simplest ways to help increase the amount of money you’re putting away for the future — which can make a big difference later on. Beginning at age 50, as of 2018 you’re allowed to make annual “catch-up” contributions to eligible retirement plans as follows:
- 401(k) [other than a SIMPLE 401(k)] — up to $6,000
- SIMPLE IRA/401(k) — up to $3,000
- Traditional or Roth IRA — up to $1,000
- Limit your tax exposure. With the new tax bill in place, your current retirement savings strategy may be outdated. For example, personal income tax brackets have been lowered for many households, so you may need to adjust your plan for taking required minimum distributions so you’re not forced into a higher bracket. Talk to a financial professional about a straightforward strategy for withdrawing money to lessen the impact of future tax seasons.
Planning for retirement — through each new phase
Preparing for retirement now can save you or a loved one from playing catch-up later. And with financial options like a reverse mortgage, you can be better prepared for the unexpected, while securing more freedom and financial flexibility for the years ahead. To learn more about the benefits of reverse mortgage for homeowners age 62 and older, call Reverse Mortgage Funding, LLC (RMF) today at 888-277-1567 for a convenient phone appointment with an experienced reverse mortgage specialist.
SEE WHAT FUNDS YOU MAY HAVE AVAILABLE
If you have equity in your home and believe you meet the eligibility requirements, a HECM may be the option that could help you retire smart.
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