How to Redefine Your Retirement in Your 50s
Posted
on Monday, January 29, 2024
in
Financial Education
Age 50 is a major milestone. Not only does it mean that you’ve lived for half a century, but it also indicates that retirement is somewhere on the horizon.
“As retirement inches closer, you must continually take stock of where you’re at and what you can do differently to reach where you want to be,” said Jennifer Hass, Senior Vice President and Human Resources & Marketing Officer at United Bank & Trust. “At age 50, there are many things you can do to maximize your savings and ensure you can do what you want when you stop working.”
If you want to retire at 65, you only have 15 years left at age 50 to make sure you have enough money saved to accomplish your goals. That may not seem like a long time, especially if you’ve been working for nearly 30 years, but there’s still time to ensure you will have what you need for your future. Following are six steps to help you determine if your retirement plan is on the right track.
- Eliminate debt. By age 50, you should have been able to eliminate, or come close to, paying off some of your largest debts, such as student loans and a mortgage. Look at your remaining debts and prioritize paying them off quickly so you can contribute more to your savings.
- Start planning what you want to do in retirement. What you want to do after you retire will determine how much money you need to save before you can do so. Start examining your plans and determine whether your savings goal will cover the cost of your retirement plans.
- Learn more about Social Security. Your Social Security benefit is determined by how long you have worked and how much you have paid in Social Security taxes. You can begin collecting Social Security at age 62. When you turn 50, you may want to create an account at ssa.gov so you can get a better idea of how much you will be able to collect, and how other savings will impact your Social Security.
- Pad your retirement savings. At age 50, experts suggest you should have 5 to 6 times your annual salary saved up in retirement accounts. If you’re behind on saving, you are allowed to make catch-up contributions. With a 401(k), you can contribute an additional $7,500 per year for a maximum of $60,500 each year once you reach age 50. You can also contribute an extra $1,000 to a traditional or Roth IRA for a maximum of $7,000 per year. Calculate how much more you can contribute to ensure you will have enough to retire comfortably.
- Update your estate plan. Age milestones are a great time to review your estate plan and make necessary adjustments. Along with a last will and testament, your estate plan should include a financial power of attorney, health care power of attorney, and a living will. You should also review beneficiary designations on life insurance, retirement plans, and other investments.
- Meet with a financial advisor. Have a professional review your finances and provide an unbiased opinion. A financial advisor can help you gauge whether your savings are on track to complete your retirement goals. An advisor can also help you set a tentative retirement date so you can rest assured your plans are within reach.
For more information about how United Bank & Trust can help you meet your retirement goals, contact us at (641) 753-5900 or [email protected].