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Saturday, July 22, 2017

Financial Strategies for Your 50s and 60s

When you first started out in your career, you may have focused on paying off student loans, buying a home and, hopefully, starting to save for retirement. Generally speaking, these are pretty straightforward goals. But by the time you enter your 50s and 60s, your financial objectives may be somewhat more complex, so you will need to take great care in creating and implementing the right strategies.
 
What You’ll Need–and What You’ll Have
During your 20s, 30s and 40s, you may have put away as much as you could afford in your 401(k) and IRA, but your more immediate concerns were paying someone else: your student loan provider, your mortgage company, your children’s college, etc. But once you reach your 50s, you may have finished with these types of obligations. And that gives you an opportunity to look ahead.
 
For starters, you’ll want to envision the type of retirement lifestyle you want. Of course, you may have done this exercise when you were younger, but, over time, your plans could easily have changed. Now it’s time to really take a close look at what you expect from retirement. Where will you live? Will you travel much? Volunteer? Open a small business? The possibilities are vast–and so are the differences in cost. So, to navigate your course during the years left until you retire, you will want to know what your retirement will look like–and how much it will cost.
 
Once you know about how much money you will need to fund your retirement, your next step is to look at your potential retirement assets: Social Security payments, distributions from your 401(k) or other employer-sponsored plan, and income from your personal investments, such as bond interest and stock dividends. Factoring in all these resources, will you have enough to enjoy a retirement that could last two or three decades? If not, what can you do about it during the years before you retire? Should you adjust your portfolio to provide more growth? Can you put in still more to your 401(k) and IRA? If you have "maxed out" on these vehicles, should you look for another tax-advantaged retirement vehicle, such as an annuity?
Clearly, these are not simple questions to answer, which is why you may be able to benefit from working with a financial professional–someone who knows your situation and can help you create individualized strategies to meet your goals.
 
Put Estate Plans in Place
Beyond estimating the cost of your retirement lifestyle and assessing your financial preparedness, what else can you do in your 50s and 60s to make sure you are on track to meet all your goals? You need to do your estate planning.
 
Specifically, you will want to have the appropriate legal documents in place. Do you have the correct beneficiaries named on your insurance policies? Do you have a will and a living trust to make sure that your assets will be distributed according to your wishes? Do you have a durable power of attorney so that someone can make financial decisions on your behalf if you become incapacitated?
 
By working with an experienced estate-planning attorney and tax professional you can protect your financial interests–and those of your family. So don’t delay–the sooner you start, the less you will have to worry about in retirement.
 

By Julie Gunn

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