Financial Planning By The Decades: When You Are 50
BOSTON (CBS) - The fourth book in this series by Peter Dunn is Your Money Life: Your 50s.
Your 50s. These are typically your prime earning years, as well as the decade when retirement begins to come within view, and it's perhaps your last opportunity to set your finances in order.
While you may not actually retire until your sixties, the success of your retirement years could well depend on financial decisions you make in your fifties. In this decade, you may be managing debt (student loans, consumer debt, and a mortgage) as well as assets, and smart management of both is critical to a comfortable retirement.
This is the decade in which folks pay attention to retirement planning. You can see retirement just beyond on the horizon waiting.
I spoke with a pre-retiree recently at a workshop I gave and she described it as standing at the entrance to a scary amusement park ride wondering if you should get on.
Hopefully you will earn more money in this decade than any of the others. Your adult children and your elderly parents may be putting demands on your money and assets in this decade. And then there are the little people that may become part of your life, your grandchildren.
The goals for this decade as you approach your 60th birthday:
- Make maximum contributions to your company sponsored retirement plan
- Consider purchasing Long Term Care Insurance (I don't know if you need it)
- Hire a financial planner (Look for a CFP)
- Make a plan to be debt free (both mortgage and credit card) before retirement
- Complete a comprehensive estate plan with an estate planning attorney
- Project what your retirement income will be and practice living on that now
- Establish permanent financial independence from your children and parents via planning
- Create a thorough retirement plan in terms of how you will spend your time in retirement. It's not a 1000 week vacation, it's a significant period in your life.