Your 50s can be an exciting time in life. You may have received a big promotion at work, or perhaps you’ve finally paid off your mortgage. Maybe your family is growing. As with any big life event, it may be time to rethink some financial decisions. Help make this time leading up to retirement a more pleasant and productive one by making these five money moves.
Re-Evaluate Your Life Insurance
By age 50, your life insurance needs may have changed, and you could be spending more money on insurance than you need to. For example, your kids are likely grown by this point, so your insurance may not have to provide as extensively if something were to happen to you.
Your home might also be paid off, or at least more so than when you purchased your policy. A lower life insurance benefit for your spouse might be more reasonable because there’s less of a mortgage it has to cover.
Map Out Your Retirement Plan
Your 50s are a good time to think about retirement. It might feel like it’s still in the distant future, but now is the time to prepare yourself. If you have a partner, talk with them about retirement. Make sure you’re on the same page about all aspects of retirement. Cover all the basics, such as when it will be, what you plan to do, where to live, how much money you’ll need, and what you need to do to reach that financial goal in time.
Once you have planned out these details, meet with a financial adviser to help you get any savings plans or investments in order.
Increase Your Retirement Savings
If you have a 401(k), turning 50 allows you to save an extra $6,000 per year ($25,000 total). Max out your yearly contributions if you’re able to. Beyond your 401(k), look at your other savings and investments and set a goal to “pay yourself first” by setting a certain percentage of each paycheck into interest-bearing accounts.
Evaluate Your Estate Planning Options
Your life situation and family have likely changed since you created your will (if you have one). Kids are grown. There might be new grandchildren. People have joined your family. Others might have passed away. Meet with an estate planning attorney to review your will, make updates, and discuss the larger legacy you hope to leave.
Cut Costs & Pay Down Debts
You don’t want to be saddled with unnecessary debt when you lose your regular income, so your 50s are a perfect time to scale down. Pay down your mortgage as much as possible or even consider downsizing. Pay off credit card balances and don’t keep adding to them. Also, consider refinancing if it will save you more in the long run.
Remember, little sacrifices now can help you avoid having to make bigger ones later. Set yourself on a better path toward retirement with these simple money tips for your 50s, even if you can only start small.