Ideally, your 50s are your last major decade for career advancement. While the retirement age keeps getting pushed back, most of us can safely say we’d like the option to retire in our 60s, or even earlier, and to do that, you need innovative strategies and to implement them as soon as possible.
While someone in their 20s starting their retirement planning will have a leg up on you, there are still plenty of options and ways you can begin to plan and make a difference for the quality of your retirement. All you need to get started is to follow this checklist.
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Invest in Professional Financial Planning
If you have assets in your name, then you will immediately benefit from the help of a professional financial advisor. They can be instrumental in creating in-depth planning applications that help you maximize your peak earnings and improve your retirement prospects. They can also help you optimize your assets and are even available for estate planning, allowing you to reduce the tax burden for yourself and, in the future, your loved ones while also maintaining control over your assets in the event of mental incapacitation or your death.
Boost Your 401(k)
Every year after you turn 50, the IRS allows you to make what’s known as a “catch-up contribution”. This way, you can beef up your 401(k) even if your contributions were on the leaner side of things earlier on in your career. With this approach, you can boost your 401(k) by an extra $7,500.
Review Your Stock Portfolio
If you have invested in the stock market, it’s important to adjust your portfolio during your 50s as you enter your 60s or even your retirement. The reason being is simple: when you retire, you ideally want the most stable stocks, rather than volatile options. A good strategy for determining the ratio of volatile vs conservative stocks is to subtract your age from 100 or 110. Your age being the percentage of conservative stocks in your portfolio, and the remaining the number of more high-risk, high-reward stocks.
Lock in Care Coverage Now
The easiest way to get the best price on long-term care coverage is to buy it when you are perfectly healthy (or as healthy as you can be). This is because pre-existing issues do, inevitably, result in higher prices or outright denials. If you don’t want long-term care coverage, however, then you will need to create a personal fund to cover those costs instead, like a health savings account (HSA).
Get Rid of Your Debt
One of the worst dark clouds you can easily carry into retirement is debt. If you have debt currently, then you must work to pay it all off before you retire, and yes, this includes your mortgage. At every opportunity, use your new loan-to-value ratio to negotiate better mortgage rates and pay down the principal as much as you can while you can. Retiring with zero debt can be a life-changer and can allow you to enjoy your hard-earned investments and pensions to the max.