Did you just turn 50? Then you have a lot to plan for the future. And if you haven’t started planning or saving for retirement, you need to start now.
More than 55% of Americans say they plan to work throughout retirement because they think they haven’t prepared enough for it. Consult a professional financial advisor to begin planning your retirement.
Until then, here are some retirement planning tips for people in their 50s.
When will you retire?
Most people retire between the ages of 62 and 64. You can use this handy retirement Social Security calculator to calculate your own retirement age.
You should calculate a potential retirement age so you will know when to apply for Social Security benefits and how it might conflict with your retirement strategy.
Additionally, you may want to coordinate with your employer to plan a retirement exit strategy.
Calculate your retirement number
In a recent guessing survey, a majority of Americans said they believed they would need $1.7 million to retire comfortably. This estimate is update of the traditional $1 million retirement nest egg, an estimate which also is a generalization.
The word “retirement” is shorthand for “retirement fund.” Your retirement is a post-working lifestyle that must be funded with your retirement fund. And your retirement fund must be designed to last for the rest of your life.
The average human lives to be 80 (women longer than men). You could outlive your retirement fund if you don’t make contingency plans relevant to your working life and finances.
Create a personalized retirement number with the aid of an accountant or financial advisor. Never “guesstimate” a retirement number.
Get in sync with a unified budget
Make a budget so you have an acute understanding of expenses, income, and bills so you can prioritize need or want. Having an exact estimate of your current finances will help you keep to your retirement number as well.
If you are a retiring couple, it helps to have a unified budget when preparing for retirement. Many working couples have separate bank accounts and are completely unaware of the other’s spending habits.
Plan a retirement talk to synchronize spending controls together and plan a retirement fund more efficiently.
Plan for medical expenses with a HSA
Retirement is an expensive endeavor. It is so expensive that many retirees never even calculate the post-working lifetime costs of medical expenses.
The older you become, the more expensive it will be to secure medical care. A healthy couple retiring at 65 will need at least $400,000 to pay their medical expenses during retirement.
You could start a health savings account (HSA) in your 50s. A health savings account is a bank account where all the money is used for medical expenses.
As long as you only withdraw funds for medical expenses, you will never pay taxes on your HSA.
Pay off debts before retiring
Pay off all or as much as your debts in your 50s before retiring. When you’re debt-free during retirement, you’ll be stress-free too.