Next step in our series. We've reached the 50s. At this point in life, a lot of you will be empty nesters. Kids are off to college or through college and starting their lives. Though this is sad, it probably frees up some money and some time.
This brings you a little closer to your retirement, and the decade when most people decide to start retirement is right around the corner.
Here are some tips on how to plan for retirement in your 50s.
Now that you don't have any kids in the house, there should be fewer expenses. You will probably have to spend much less on groceries. If they are working, they might be off your health insurance and car insurance. Review your spending and find places you can trim.
Create a budget
If you don't have a budget created at this point, what are you doing?! Fear not, it's never too late. Review spending and create a budget with various categories and spending limits. Here's how to create a budget.
It's much easier to plan for retirement when you understand what you are doing. Educate yourself. Read books and blogs. Listen to podcasts and watch instructional videos.
If you don't have the time for that, hire a professional. Read this post I wrote about how to hire a competent and trustworthy one.
Focus on your career
Even though it is sad that your children are moving on to bigger, better things, it frees up some time. With this new found time, put some of it into your career.
This will hopefully help you increase your earnings, and give you more money to save for your retirement.
Invest, don't speculate
Investing for retirement should be done thoughtfully and diligently. If you are a little behind on your savings, don't try to make up for it by investing speculatively.
Invest by what's appropriate given your time horizon and risk tolerance.
Regularly review your progress
Hopefully, you have a retirement plan written down and in place. You should revisit this plan regularly. The closer you get to retirement, the more often you should review the plan.
By reviewing the plan periodically, you are able to track your progress and make adjustments if you need to.
You've reached the catch-up contribution age! You are now able to contribute a higher maximum to your retirement accounts.
If you have a 401(k), you can contribute an additional $6,000. If you have a SIMPLE IRA, you can contribute an additional $3,000. If you have a Traditional IRA or Roth IRA, you can contribute an additional $1,000.
I touched on this a bit in the last post, but you need to think about what you want retirement to look like. What will you do? Where will you retire? Where will you live? Answer these questions and others so you can plan more effectively.
Ask a professional
It's never a bad idea to ask a professional to review your progress. I linked to a post earlier about how to find a trustworthy and knowledgeable person, that can help you track your retirement and make adjustments where you need to.
Planning for retirement, as I've said before, is important at any age. Each decade brings new challenges and new necessities.
With your 50s, you probably have a little more income available because you are further into your career and probably don't have kids (or as many kids) living at home.
Use these tips to help you on your journey to retirement.