Your 50’s are a wonderful time. At this age, you’re (hopefully) an empty nester, and there’s a good chance you can see the finish line to retirement. It’s also a time where it can be easy to lose your way in terms of finances. Keep yourself on track with this financial advice.
Long-Term Care Insurance
There’s no way of knowing what the future holds. Serious injury, or illness can lead to hefty expenses in your later years that you didn’t anticipate. Long-term care insurance is a safety net you should invest in. It will ensure you get the medical help and assistance if something unexpected should happen. The peace of mind is worth the cost.
Avoid New Debt
While you might be tempted to make some large purchases once your nest is empty, it’s not a good idea. Many people make the mistake of adding new debt onto their plate when retirement is on the horizon. For example, they may decide to downsize their home and take on a brand new 30 year mortgage. While this isn’t a necessarily a bad thing, the problem comes when they fail to factor that new mortgage into their retirement plans. Taking on any additional debt means you’ll need to increase the amount of money you need to live on when you retire. One large purchase could completely throw off your estimated monthly living costs. A smarter way to operate would be to hold off on any significant purchases until retirement. However, if a large purchase is necessary, pay cash.
Get Out of Debt
In addition to avoiding new debt, it’s crucial that you get out of any that you currently have. Take advantage of your 50’s to aggressively attack your debt. You definitely don’t want it hanging over your head during retirement. You don’t have to worry so much about paying off your home, but credit card debt, vehicle debt, medical debt, and any remaining student loan debt has got to go. This is a great way to set yourself up for success in retirement. Get rid of the financial baggage that’s weighing you down. Once you’ve cleaned up the mess, you can start adding more money to your retirement and savings accounts. You will feel good about moving forward knowing it will be easy for you to live within your means.
The Big Picture
When thinking about retirement, many people fail to think about how long you’ll likely live passed 65. The reality is, many people will see another 15-20 years past the age of retirement. Make sure you’re looking at the bigger picture. It’s important to account for every year you’ll be living on a small, fixed income. The importance of making smart, long term financial decisions cannot be overstated.
Your 50’s are a fun and exciting time. They’re also the perfect time to start buckling down to prepare for retirement. Making smart financial decisions now will make retirement that much sweeter.