For most of our lives, retirement seems forever away.
We know we need to prepare for it and we know that retirement will eventually get here, but the daily grind has a funny way of giving us tunnel vision that sets our focus on the present.
But as anyone who is 50 will tell you: Time flies – and it flies quickly.
If you’re in your 50s, retirement is right around the corner. Whether you’ve been saving diligently since you were 20 or are just now planning your retirement, your 50s are a critical decade to prepare for your golden years.
The earlier you start planning for retirement, the better. But sometimes “life happens.” Since it’s impossible to go backward in time, there’s no use dwelling on what you “could have” or “should have” done better.
Instead, let’s focus on what you can do today to make your retirement as enjoyable, relaxing, financially steady, and fun as possible!
Get Ready for Retirement: 9 Things to Do in Your 50s
Whether you're just starting to think about retirement or you're well on your way to financial freedom, these 11 steps can help you get ready for the future. From reviewing your current financial situation to setting retirement savings goals, these tips will put you on the right track to a successful retirement.
1. Prioritize Your Health.
It doesn’t matter how much money you save for retirement if you can’t enjoy it. So begin by prioritizing your health no matter what. Maintaining good health is important at any age, but it becomes increasingly important as you get older, as your body doesn’t recover as quickly as it used to. Make sure to eat a healthy diet, get regular exercise, and take care of any health issues that may arise. This will help you stay active and independent in retirement. If you’ve been wanting to make any lifestyle changes such as quitting smoking or losing weight, this is really the time to make those changes.
2. Review Your Current Financial Situation.
One of the first things you should do to prepare for retirement is to take a thorough look at your current financial situation. This includes evaluating your savings, investments, and debts. Don’t forget to track your expenses as well. It's important to understand where you stand financially so that you can make informed decisions about your retirement plans.
By reviewing your current financial situation, you can get a good idea of your current financial position and what you need to do in order to retire comfortably. For example, you may need to increase your savings or investments, pay off high-interest debt, or make other financial adjustments. Taking the time to review your current financial situation will help you feel more in control of your financial future and better prepared for retirement.
3. Set, Check-In with, or Re-Adjust Your Retirement Savings Goals.
Are you on track to achieve your retirement goals? If not, it's time to get serious about saving and investing. One of the most important things you can do to prepare for retirement is to set clear and specific retirement savings goals. To do this, you'll need to determine how much money you'll need to retire comfortably.
This will likely depend on factors such as your desired lifestyle, your expected healthcare costs, and your other financial obligations. Once you have a target savings goal in mind, it's time to create a plan to save and invest accordingly. This may involve increasing your contributions to your 401(k) or other retirement accounts or finding other ways to save and invest your money. At age 50 in 2023, you should be allowed to put $22,500 into your 401K accounts annually.
Don't wait until it's too late – start setting retirement savings goals today and take control of your financial future.
4. Plan Your Healthcare (Insurance/Medicare) Needs.
As you get older, healthcare costs can start to add up. In fact, according to the Centers for Medicare and Medicaid Services (CMS), the average retiree spends around $5,000 per year on out-of-pocket healthcare expenses. That's why it's so important to consider your healthcare needs when preparing for retirement.
You'll need to decide how you'll pay for things like doctor's visits, prescription medications, and long-term care. One option is to purchase long-term care insurance, which can help cover the cost of assisted living or nursing home care. Alternatively, you may be eligible for government programs like Medicare or Medicaid, which can help pay for healthcare costs in retirement.
Don't wait until you're sick or injured to start thinking about your healthcare needs – start planning now and protect your health and financial well-being in retirement. Again, this is why point #1 (prioritizing your health) is so important.
5. Pay Off Any Outstanding Debt.
Ready to wave goodbye to high-interest credit card debt for good? If you're in your 50s, now is the time to start paying off any lingering debts. Not only will getting rid of high-interest debt free up more of your income for retirement savings, it will also reduce your financial stress and give you more peace of mind.
To pay off debt quickly, you'll need to have a solid plan in place. This may involve consolidating your debt, negotiating with creditors, or finding other ways to lower your interest rates. Don't let debt hold you back from achieving your retirement goals – start paying it off today and take control of your financial future.
6. Organize Your Legal and Financial Documents.
Don't leave your loved ones in the dark about your wishes – make sure your legal and financial documents are in order before you retire. This includes having a will, power of attorney, and an advanced healthcare directive in place.
A will ensures that your assets are distributed according to your wishes after you pass away. A power of attorney allows you to appoint someone to make financial and legal decisions on your behalf in the event that you become incapacitated. An advanced healthcare directive lets you specify your end-of-life care preferences and appoint someone to make medical decisions on your behalf.
By having these important documents in place, you'll be able to ensure that your wishes are carried out and your loved ones are protected if you become unable to make decisions for yourself. For many people, these are tough issues to discuss, but it’s important not to put it off any longer. This is for your peace of mind as well as your family’s.
7. Begin Thinking/Planning Your Housing Needs.
When it comes to retirement, your home is more than just a place to hang your hat – it's an important part of your overall financial plan. As you get ready to retire, you'll need to think about where you want to live and whether you'll need to make any changes to your living situation. For example, you may want to downsize to a smaller home or move to a more affordable area. Alternatively, you may want to stay put and make renovations or upgrades to your current home.
No matter what you decide, it's important to consider the cost of living in different areas and whether you'll need to budget for housing expenses in retirement. After all, your housing costs can have a big impact on your overall financial stability in retirement.
8. Make Sure You Understand Your Social Security Benefits.
Social Security is an important source of income for many retirees, but it can be confusing to understand how it works. That's why it's so important to make sure you understand your options when it comes to Social Security. First and foremost, you'll need to know when you're eligible to start receiving benefits.
In general, you can start receiving Social Security at age 62, but you'll receive a higher monthly benefit if you wait until your full retirement age (FRA) to start receiving benefits. Your FRA depends on the year you were born, but it's typically between 66 and 67. Once you know your FRA, you can decide whether it makes sense for you to start receiving benefits at age 62, at your FRA, or at some point in between.
Keep in mind that your decision will affect the amount of benefits you receive, so it's important to consider your individual circumstances when deciding when to start receiving Social Security. If you retire early, you won’t receive your full benefits, whereas retirement at FRA will ensure you get the full amount.
9. Make or Update Your Retirement Plan.
By creating a detailed retirement plan, you'll be able to feel more secure and prepared for the next chapter of your life. So, what should you include in your retirement plan? First and foremost, think about how you want to spend your time in retirement. Do you want to travel, volunteer, pursue hobbies, or spend time with family and friends?
Next, consider where you want to live. Will you stay put or relocate to a new city or state? Do you plan on living alone, if your health allows it? Do you foresee needing to move into an assisted living facility?
Finally, don't forget to think about how you'll manage your financial resources in retirement. This includes figuring out how much money you'll need to live on, how you'll pay for healthcare costs, and how you'll protect your assets. By taking the time to create a detailed retirement plan, you'll be able to enjoy your retirement years with confidence and peace of mind.
There is no one-size-fits-all when it comes to planning for retirement, but the sooner you begin planning for it, the better!
Typically, most people begin pulling out of the stock market closer to retirement age and putting their money in more stable investments such as bonds.
One factor to consider is the bank that you use. On the one hand, it’s better to rely less and less on the stock market closer to retirement age. Why? Because while stocks have a history of long-term growth, retirees can’t afford the unpredictability of the stock market. But on the other hand, you also want to prevent inflation from devaluing your hard-earned savings.
While young workers can ride the ups and downs of the market, retirees need the money and can’t afford to wait for the market to recover.
This is why I like using CIT Bank. They provide an APY that is 4X the national average! This is an excellent place to keep your money. It’s not just what I recommend – it’s what I use.
Looking for more ideas on how to take control of your finances? If so, I encourage you to join the TBM Family on Facebook. It’s an incredible resource and a place to connect with other people who are also prioritizing their financial health and wellness. Hope to see you there!