A few months ago I wrote a blog post about the 83 most important financial tasks to make before you turn 30 years old to ensure that you have a great retirement. There are many key financial tasks that you need to make sure that you are doing to make certain that you will have a great set of Golden Years. But, many of our more mature readers asked about moves they should be making, and I did not want to leave them out.
While it is never too late for anyone who has not completed the 83 financial tasks in their thirties, there is no time to lose. If you are past that bench mark, there is no time to lose! If you are 50 years old or older, you probably only have ten to fifteen years left until retirement. Your focus needs to be considerably different than an investor in their twenties or thirties. It is not too late. It is never too late. But, the time is now! These are the moves you need to make or should have already made by your 50′s to be on track to a great retirement.
50 Moves to Make in Your 50′s…
- Make catch up contributions to your IRA and/or 401-k retirement plans, an extra $1,000 in catch up contributions to your Roth IRA and extra $5,500 to your 401-k
- Continue to max out your Roth IRA if you are eligible for one
- Consider rolling over your traditional IRA this year into a Roth IRA
- Reassess your asset allocations and rebalance your portfolio to ensure that you do not have too much risk as you near retirement
- Continue to shift your investments away from riskier investments like stocks into safer investments such as bonds
- Continue investing in index funds and no load mutual funds in some capacity. Do not just stop totally investing in stocks and mutual funds during your Golden Years
- Continue investing using dollar cost averaging
- Do not have too much of your nest egg invested in your company’s stock. Diversify. Many experts recommend keeping no more than 10% of your total investment portfolio in your company’s stock.
- Pay yourself first with your investments. Now is not the time to stop or slow down investing. Your 50′s are the time to ramp them up.
- Pay off your credit cards and other consumer debt if you have not already
- Pay off your HELOC mortgage and do not take out another one so late in life unless it is absolutely necessary.
- Pay off your home mortgage and other mortgages. Having your home free and clear can free up a lot of new disposable income, reduce the income you need in retirement, and may lower your life insurance need as well.
- Re-evaluate your life insurance needs after major life changes in your 50′s such as paying off your mortgage. You may find that you need far less.
- Be very careful and skeptical when considering reverse mortgages
- Consider alternate income streams like rental property, dividends, etc. to support you in retirement
- Check your credit report every year to protect yourself from identity theft
- Don’t buy gold from late night television. You do not need gold or other exotic investments in order to be diversified in your investments no matter how much it rises in the short term.
- Continue taking a brown bag lunch to work and skip going out to eat
- Consider starting a second career or starting your own small business
- Switch jobs if you are not happy. Life is too short not to be working in a job or career that you are absolutely passionate about.
- Do not let loyalty to a job, a boss, or an organization get in the way of a greater earning potential. There is no reward for job loyalty anymore.
- Consider working a few years longer and delaying retirement
- Consider waiting until 65 years old to draw your Social Security benefits
- Continue learning and earning credentials, certifications, etc.
- Do not cash out a Roth IRA before you are 59 ½ years old
- Do not take a 401-k loan unless you absolutely have no other choice
- Have a will and make sure that it is up-to-date with the correct beneficiaries
- Ensure that you have a healthcare proxy and living will and discuss your wishes with your family members
- Price long term care insurance by the your 60th birthday before rates skyrocket out of control
- Talk with your parents about their elderly care and funeral wishes. Talking about it now will help ease the pain at end of life or hospitalization happen. And, remember to do the same for your children.
- Carefully weigh the pros and cons of annuities before investing in them since they can have high fees, but annuities may offer great retirement income diversification.
- Seek professional advice from a fee only Certified Financial Planner (CFP) to help you crunch the numbers if you think that you can retire early
- Consider hiring an accountant or other tax professionals if your tax bills are getting too complicated for you to do them yourself.
- Continue to set financial goals for yourself and revisit them often
- Rekindle relationships with your friends so you have people to do things with during retirement
- Drive your car into the ground while saving to buy a new one with cash
- Limit the amount of support that you give your grown children
- Have three to six months of expenses in an emergency fund
- Consider having more than three to six months of expenses in an emergency fund especially if you have medical bills or other rainy day expenses coming up in your life.
- Buy generic medication when it is available to you and ask your doctor to prescribe only generics when he can
- Do not get needless medical tests done…especially if a portion of their cost will come out of your own pocket.
- Do not hesitate to get a second opinion with respect to your medical diagnosis or financial plan as well
- Practice being frugal wherever and whenever you can
- Do not beat yourself up about your financial mistakes that you make. Learn from them, strive not to repeat them, and move on.
- Continue teaching your children about money and investing even when they are grown. Always be there for them for advice when they seek it and keep the communication lines open to them.
- Guard against getting a divorce so late in life. A 50% loss in assets and a pension would be devastating so late in life with little time to make up for the losses in the market.
- Minimize your tax liability, and study tax structure carefully. You may want to consider moving to a tax friendly state that treats retirement income in a better light than ordinary income.
- Stay informed in political matters. You may want to consider joining associations and organizations that have your age group’s best interests at heart such as AARP, etc. There is legislation every year that is passed that greatly affects the wallets of retirees and those almost ready to retire.
- Learn how to harness the power of Twitter, LinkedIn, and Facebook to boost your networks, rekindle old friendships, and position yourselves for new jobs or careers.
- Embrace new technologies and continue following and reading blogs to learn the latest news, tips, and information
Your 50′s are not the time of your life to lose sight of the end. Retirement is in your grasp. You are almost there, and the choices that you make during your 50′s will continue to set you up for success or will trip you up in retirement. With the end so close, you cannot afford to make a mistake during this critical decade of your life. Did I get them all? Which tips do you think missed the mark? Which ones should have been in the list. Please leave a comment…
Also check out the great book… “ The Everything Personal Finance In Your 40′s and 50′s Book” by Jennifer and Bill Lane!
What is your favorite personal finance tip in your 50′s?
- 83 Money Moves To Make Before You Are 30 Years Old
- Three Things That The Earthquake In Haiti Reminds Me About Personal Finance
- Get Back To The Blocking And Tackling Basics of Personal Finance