This is the best financial advice for 50-year-olds you should know

October 23, 2013 Posted In Estate Planning
by Colorado Estate Matters

In Colorado and throughout the nation, those in their 50s feel younger and more vibrant than they did a few generations ago. This false sense of security causes many in their 50s to make financial decisions that could negatively impact them as they age.

Those in their 50s should make attitudinal changes to ensure a better life in their 80s and beyond. These changes begin with estate planning, and it is vital to work with a team you can trust. Our Denver estate planning attorneys offer years of experience, education, and a personal touch. We are dedicated to helping you plan your estate in a way that makes you comfortable and fits your needs.

best financial advice for 50 year olds

Financial checklist for 50 year olds

When deciding the right financial goals for 50-year-olds, our team likes to start with a checklist of actions to understand where the client is and where they are heading in life. Those with excellent health and strong financial holdings will have a different path from those needing substantial medical care or many obligations. Our estate lawyers are prepared to guide you without judgment, searching for the best solution no matter your situation.

Schedule a meeting with a professional to make a financial inventory

Taking an honest look at what you have and what you expect in the future can be uncomfortable, but it’s the most important step. According to a survey by AARP, 20% of Americans over 50 do not have any retirement savings. Over 60% of the respondents worry that they don’t have enough savings to last through retirement.

Working with an unbiased professional can ease the pain of facing this situation. If you are confident in your finances, a planner can show you ways to improve a good scenario. Writing down what you have, what you owe, and what sort of life you want as you age can give you a clearer picture of what steps you need to take.

Make smart changes to your expenses

Once you’ve inventoried your assets and liabilities, it’s time to cut what’s unnecessary and maximize your income. Reduce expenses you’ve forgotten about because they were on autopay. Identify your minimum needs, such as housing, healthcare, and transportation, then assess discretionary expenses you don’t want to give up, such as travel.

Maximize your retirement savings and examine potential income streams

Many people rely on Social Security when they retire, but reports substantial changes happening in the future for Social Security recipients. By setting up your SSA account now, you can monitor your expected retirement income and decide what age would be right for you.

Review your pension or retirement savings accounts, and consider moving any stock or other investments into less risky profiles. Ramp up what you deposit into 401K or Roth IRA accounts if possible. Finally, determine if you have the skills for “side hustles” that could generate additional income while working towards retirement age.

Eliminate credit card debt and reinforce your emergency fund

The primary financial goals for 50-year-olds are to have as little debt and as much savings as possible. Start by paying more than the minimum on your highest balance credit card or loan, then move to the next highest until everything is paid off. Add to your emergency and savings funds each month.

Consider getting by with one vehicle or fewer possessions to build up your savings. Cutting things to the bone for several years can be hard, but it pays off when you can cover your expenses without a job in retirement.

Review your life insurance needs

Many of those in their 50s feel younger and are more likely to put off thinking about retirement or the end of their lives. Nonetheless, ensuring your insurance coverage is in order is vital to peace of mind for you and your family. Review your life insurance policies and ensure the information and beneficiaries are accurate.

Review your estate plan

Work with an experienced estate planner to prepare your will, powers of attorney, and trusts you may need. Doing this now ensures your loved ones aren’t wondering about your final wishes. You also control your estate distribution rather than leaving the decisions to Colorado descendency laws.

At Colorado Estate Matters, our experienced estate planners help you determine your needs and handle the legal complexities. When your needs change, we adjust your documents so everything is current.

Invest wisely

Don’t take on new debt, not even debt to pay for a college education. Instead, those in their 50s should actively invest money now since they will need it soon. According to Equifax, at age 50, you should have six times your annual salary saved for retirement.

When investing, we caution against the lure of the traditional IRA since no one can predict or control what taxes will look like when it is time to retire. We suggest using the Roth IRA and paying taxes upfront. We also recommend investing in long-term care insurance. No one likes to think about growing old and infirm. However, long-term care is a reality for many Americans. The insurance is not inexpensive, but it is necessary.

Another suggestion is to acknowledge that brain function decreases as we age. This unfortunate fact means that 50-somethings should work with a professional to outline a retirement strategy requiring minimal investment monitoring or intense decision-making. To craft a retirement strategy that recognizes the limitations of an aging brain, contact an attorney specializing in estate planning at Colorado Estate Matters by calling (303) 713-9147 to schedule a free consultation today.

We’re here to help you meet your financial goals

Our Denver estate planning attorneys bring a wealth of experience, extensive education, and a personalized approach to each client. We are committed to crafting an estate plan that meets your unique needs and ensures your comfort and peace of mind throughout the process. Call (303) 713-9147 to schedule your free consultation today.

Schedule your free consultation

  • This field is for validation purposes and should be left unchanged.
  • This field is for validation purposes and should be left unchanged.