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Strategies for Building Wealth in Your 50s
Now is The Time to Strengthen Your Finances and Finalize Your Retirement Plans
While it’s true that it’s better to begin saving earlier rather than later, it’s not too late to start building wealth in your 50s. In this decade of life, there are still smart moves you can make to help strengthen and grow your finances. Of course, as you get closer to retirement, the financial choices you make begin to carry more weight, so how you save and invest during this decade of your life will directly affect what your life looks like in retirement.
Below are six moves you can make in your 50s to build your wealth and better prepare yourself for retirement.
1. Build a Budget for Retirement
One of the most crucial aspects of proper money management in any decade of life is having a budget that appropriately reflects your financial reality and future goals. You’ll want to start by looking at how much you have saved for retirement, along with how your income and expenses are going to look as you get closer to that next phase of life. Don’t forget to factor in healthcare expenses as they’re one of the biggest roadblocks to financial security that retirees face. If your savings is still lacking, look at where you might be able to cut out some unnecessary spending in your life – now is really the time to singularly focus on saving as much as you can for the next stage of your life.
2. Eliminate Any Lingering Debt
While you’re still working and have a steady income that you can depend on, now is a good time to tackle your debts so that you can leave that financial stress behind once you retire. It’s financially savvy to start with your higher balances and any debts that have high interest rates. And while that’s a good idea, it may help you stay motivated to start with your smaller balances instead. Being able to watch yourself cross off debts one at a time can give you the motivation and confidence you need to finally face those larger balances. Whatever avenue you choose to take to stamp out your debts, what matters is that you stay committed to eliminating as much of them as possible before you leave the workforce.
3. Beef Up Your Retirement Accounts
With decades of work behind you, chances are you’ve been putting some money away into your retirement accounts consistently. Now that you’re in your 50s though, it’s time to maximize your contributions and get as much as you can out of compounding interest. So, start maxing out your 401(k), 403(b) and other retirement savings accounts. Once you hit age 50, you’re able to contribute an additional $1,000 into your IRAs, which can be a great super boost to your savings, too.
4. Rebalance Your Portfolio
As a young investor, taking more risks with your investments is smart, and it can be exciting, too. However, the closer you get to retirement the more you’re going to want to begin scaling back the risk in your portfolio. After all, you’re going to need to depend on that money to provide you with an income stream once you no longer have traditional paychecks. Take some time to review your portfolio and pull your money out of your riskier stocks to invest them into ones that are more stable. You’ll also want to be sure that your investments are properly diversified so that you don’t have all of your eggs in one proverbial basket.
Concluding Thoughts on Building Wealth in Your 50s
You can make smart retirement planning moves at any stage of life, but your 50s are the time to be sure that you have a firm grasp on your plans, and you know what steps to take before you finally say goodbye to your working life. If you’re not where you think you should be on your savings journey, that’s okay – you still have time make progress toward building wealth in your 50s. You just have to be diligent and intentional about it. The above tips are meant to help you boost your finances and bring you closer to accomplishing your money goals for retirement.
If you think you would benefit from a conversation about how to build your wealth in your fifties, or at any age for that matter, contact Lane Hipple Wealth Management Group at our Moorestown, NJ office by calling 856-638-1855, emailing info@lanehipple.com, or to schedule a complimentary discovery call, use this link to find a convenient time.
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Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents of it on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.
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Retirement Planning: How to Live Like It’s Summer Vacation Forever
Focus on Your Retirement Strategy Scorecard So You Can Relax
Wouldn’t you love to live like it’s summer vacation forever? With a strong financial retirement strategy, you can. How? When it comes to finances, looking at the long-term game is often the smartest course of action. That’s why we suggest setting up your own personalized “retirement strategy scorecard,” a method that can help you get started and guide you along the way.
Whatever you want out of retirement, your retirement strategy scorecard can be a great tool to help you get there. Get out the SPF and get ready to relax–summer vacation in retirement can last, well, all year with proper planning.
Financial Retirement Planning: Start where you are
Seasons change, but where you start makes a big difference. Take account of where your finances currently stand by reviewing your resources. Make sure you have these documents on hand to get started on your retirement strategy scorecard:
- A net worth statement, which analyzes how much cash flow you’ll need to support your retirement lifestyle
- A high-level look at your 401(K) plan or other retirement accounts, and your current investment allocation
- An analysis of the rest of your portfolio, which can outline what’s included in any funds beyond your 401(k)
Then look beyond the basics
When planning for retirement, a lot of people fail to realize they should take resources into account beyond their 401(k) and other funds. When you’re putting together your retirement big picture, take these into an account:
- Mortgages: How much do you owe and how long do you have to pay it off?
- Social Security benefits: Make sure you log into the official Social Security Administration website to determine your benefit level
- Benefits from previous partners, which can include retirement benefits, interests in accounts, or life insurance
- Your own permanent life insurance policies, to determine if there’s cash value
Analyze your retirement options
Now that you know where your finances stand, you can start planning the fun part: everything that’s possible once the next phase of your life begins.
Don’t be afraid to dream big. See this as an opportunity to reassess your wants and needs. Retirement is relatively responsibility-free, which can be disorienting after a successful career. It’s a chance to recapture your spark, to build your next step intentionally.
Wherever you want to go, whatever you want to do, develop a plan that points the way.
Give your plan a practice run
You wouldn’t buy a car without a test drive. The same goes for your retirement plan. Once you’ve analyzed your options and have a good idea of how you’d like to spend your time and structure your life, consider taking some time off to take your retirement ideas for a spin.
Immersing yourself in these activities can give you a good idea of how well reality meets expectations. If the two don’t quite match up, fear not. There’s plenty of time to alter your plan and create a retirement life that truly works for you.
One thing to consider: think about picking up a part-time job in an industry that you’re interested in. Studies show that a successful retirement isn’t necessarily all about leisure—working in retirement can actually bring you greater happiness.
Get your goals down on paper
Taking time to outline goals makes a big difference when it comes to achieving them. If you have an idea in mind, writing it down can actually help you turn it into a reality—according to a recent study, 76% of participants with written goals achieved those goals, compared to 43% of people who didn’t write them down.
Draft your plan, create a map for your next phase, and dig into the details. Outline the steps you need to take to get where you want to be and keep them at the front of your mind. Continuously review them as your circumstances change and your priorities shift. They’re your goals—you get to choose what’s important and where your future goes.
It’s about more than just finances
If you think the most common retirement planning pitfall is a lack of finances, think again. It’s actually a lack of vision. Summer vacation is about enjoying the moment, leaving stress behind, and leaning into life’s smaller, simpler moments. Embrace that mindset when you embark on the retirement planning process, but don’t forget to enjoy the present, too.
The retirement strategy scorecard’s added power is its ability to deliver peace of mind not just for tomorrow, but also for today. To get started on a retirement plan that can help you live your next chapter like it’s summer vacation forever, contact Lane Hipple at our Moorestown, NJ office by calling 856-638-1855, emailing info@lanehipple.com, or to schedule a complimentary discovery call, use this link to find a convenient time.
Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents of it on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.
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Stock market pullback puts spotlight on Roth conversions
You may have heard the strategy, “buy the dip”, but do you know how to “convert the dip”? That is a maneuver some financial planners are educating their clients on to maximize tax benefits. A Roth IRA conversion involves the transfer of assets from a traditional, SEP, or SIMPLE IRA, or from a defined contribution plan like a 401(k), into a Roth IRA. To convert, the account owner pays a one-time income tax on the amount transferred and the account becomes eligible to make tax-free withdrawals in the future. As a result, the Roth IRA is now growing tax-free. The following article from InvestmentNews.com, written by Jeff Benjamin, explains why now may be the right time to convert.
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