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Make these moves in the 50s to set yourself up for a safe retirement – The Motley Fool



Your 50s are a crucial time on the road to retirement. Chances are, you'll earn more money in the 50's than you previously did in your career, which means you get more financial flexibility than ever before. On the other hand, you may have more expenses to deal with, such as your children's college lessons. Still, if you want to retire comfortably, spend your 50's focused on goals that can help make it happen. Here are a few to target.

first Build A Fully Loaded Emergency Fund

Without a solid savings level, you risk raising your debt the next time an unplanned expense comes your way. And debt-taking over the years before retirement increases your risk of carrying the financial burden of your golden years and struggling for it. A better game? Amass a Healthy Emergency Fund ̵

1; ideally one with enough money to cover living expenses of up to six months. This will help you avoid debt if you lose your job, encounter a huge home repair or suffer from unusually high medical bills.

  Middle-aged man sitting on stairs wearing gray sweatshirt over yellow t-shirt

Image source: Getty Images.

2nd Stay your nose egg

When you are 50, you have a good opportunity to obtain pension savings. This is because IRA and 401 (k) contribution limits are higher for workers 50 and over. Currently, you can contribute up to $ 7,000 a year to the former and $ 25,000 a year to the latter. Capitalizing on catching up can increase your savings in a meaningful way. If you are 57 today and want to retire at age 67, $ 25,000 a year will be earmarked from time to time, and you will receive an additional $ 345,000 in your own egg if your investment generates an average 7% return in during that time. Even though you can't maximize your 401 (k), increase your retirement plan contributions over the 50's so you get extra income when your golden years roll around.

3rd Funding a Health Savings Account

Healthcare is one of the pensioner's largest current expenses. Therefore, it is smart to contribute to a health savings account or HSA during the 50s. The money you contribute (on a tax-free basis) can be invested so that it grows to a larger sum, and as long as you spend the money on qualified medical expenses, you can take tax-free payments. To qualify for an HSA, you must be enrolled in a high deductible insurance plan (meaning an annual deduction of $ 1,350 or more for single coverage and $ 2,700 or more for family coverage). You can contribute up to $ 3,500 to an HSA as an individual this year or up to $ 7,000 for a family, and if you are 55 or older, you get a $ 1,000 deposit for startup.

4th Paying Your Mortgage Loan

Right up there with healthcare, housing is another expense that tends to eat a large portion of retirement income. Therefore, if you are able to pay your mortgage in time for your senior years, you have a smaller monthly bill to worry about. A relatively painless way to chip away on your mortgage is to take your monthly payment, split it in half, and pay that amount every two weeks. By doing so, you make an additional mortgage payment each year. Create the practice for the entire 50's, and there's a good chance that you will become housing-free when your career closes.

5th Buying long-term care insurance

It is estimated that 70% of seniors 65 and over settle the need for some form of long-term care. And without insurance, the cost can be astronomical – think $ 48,000 a year on average to stay in an assisted living facility and about $ 90,000 to $ 100,000 a year on average for nursing homes, depending on whether you get a private room. Without long-term care insurance you will be alone to cover these costs, as Medicare will not pick up the tab, so rather than run the risk. The best time to do so is your early to mid-50s. At that time, you do not pay premiums prematurely, but you are also more likely to lock a favorable premium rate based on your age and health. The cost of your policy depends on a number of factors, such as: The cover amount you want to secure, then shop around and see what options are available to you.

Though your 50's is time to continue focusing on your career, they're also a time to start thinking seriously about your golden years. Make these smart moves and you will set the stage for a financially secure retirement.


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