Top Tips for those in their 50s

Your 50s are the time to start making plans for life after work. Retirement isn’t that far away but you’ve still got plenty of time to make sure you’re enjoying life and preparing for the changes ahead. It’s time to pay off those lingering debts so you can save and invest for the future.

Here are our top tips:

1. Stop the mollycoddling

You’re thinking about retirement now, so you can’t be financially coddling your children as you did in your 40s – they can always borrow money for a house or car, but you can’t borrow to finance your retirement.

2. Save furiously

If you’re planning to retire at 60, you still have a quarter of your working life left to build up a retirement nest-egg – if you knuckle down and really work on saving as much as you can. Make sure your money is really working for you by compounding interest.

3. Is your estate in order

Now is a good time to look over your Will, and possibly make amendments if there have been any changes in your life: any marriages/divorces/births/deaths since you last solidified your estate? It’s also advisable to discuss your wishes with your heirs, particularly if you’re planning on leaving differing amounts to your family members.

4. Reducing

Inheritance tax planning needs to be looked at around this time: to avoid this, you can start looking at giving away assets. The rules are very complicated though, so engage a trusted financial adviser before you start handing things over!

5. Don’t get yourself into any debt

You might be looking at downsizing or perhaps a sea-change, but you still need to consider how your cash-flow will work in retirement if this entails a new mortgage. Be sensible, don’t bite off more than you can chew, and don’t overestimate your lifestyle post retirement.

6. Look at your long term care

Your health insurance needs change as you get older: and medical costs can be a grey area in retirement. If you’re lucky, and remain healthy, then there’s nothing to worry about, but if you do have any ongoing or chronic medical conditions, you’ll need to look at long term care insurance so that medical costs don’t restrict your lifestyle.

7. It’s not the finish line

We tend to think about retirement as the finish line, but the truth is you’re likely to live 20 years or more after the retirement age of 65. If you are 50 today, that’s 35 years of market ups and downs, inflation and all the rest of it. While moving toward more conservative investments makes sense as you get older, don’t overdo it. You’ll need the power of compounding to ensure that your nest eggs lasts well into your later years.

8. Look at your saving options

There are better savings for those over 50: talk to your financial adviser about options in IRAs and health savings accounts. The government wants you to retire well! So make the most of everything that’s offered.

9. Reinforce your emergency fund

There’s little value in putting away money into a retirement account if you’re withdrawing it to cover unexpected expenses. Make sure you have enough money in your ‘emergency’ account to cover at least six months of living expenses.

10. Get rid of debt

Similarly, don’t put away money if you’re still racking up debt. Pay off that lingering Amex, that mortgage, that Caribbean cruise you went on last year. And if you continue to use your credit card, make sure you do it sensibly and pay it off each month. Yes, you need to save for retirement but it doesn’t make sense to do so until you’ve eliminated credit card debt, given that the interest charged is likely greater than what you’d earn on assets allocated to retirement.

About Expat Financial

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Regardless of whether you’re a financial novice or a seasoned investor we specialise in helping you to achieve your goals.

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