In Colorado and throughout the nation, those in their 50s feel younger and more vibrant than they did a few generations ago. According to Forbes Magazine, this false sense of security causes many in their 50s to make some financial decisions that could negatively impact them as they age. Forbes acknowledges that those in their 50s have reached a point in life that feels celebratory. The kids have left the nest, and retirement is within view. Life is good.
While living life to the fullest, however, those in their 50s should make attitudinal changes now to ensure a better life in their 80s and beyond. These changes begin with estate planning. The magazine cautions against taking 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 in the near future.
When investing, Forbes cautions 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. Instead, the magazine suggests using the Roth IRA and paying taxes upfront. Forbes also suggests 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 that will not require frequent monitoring of investments or intense decision making. To craft a retirement strategy that recognizes the limitations of an aging brain, it may be helpful to work with an attorney who specializes in estate planning.
Source: Forbes, “5 financial decisions made in your 50s that may haunt you in your 80s“, Nancy Anderson, October 17, 2013
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