If you've recently reached the half-century mark, you've probably got some savings, a 401(k), and at least some idea of where and how you want to live when the time comes to close your office door for the last time and say hello to the wonderful world of retirement. However, in order to get the most of your retirement years, it's essential to plan for them so that you can afford to have a decent quality of life. Following are four ways that those 50 and over can help make sure golden years are truly golden.
Pay Off Debt
Your fifth decade is an ideal time to begin paying off as much debt as possible—you'll be on top of the game if you can enter your retirement years debt-free. If possible, accelerate your mortgage payment so that you'll own your home free and clear by the time you retire. This is a good strategy even if you're planning on selling your home and relocating elsewhere to enjoy your retirement years because there is no way of knowing what the real estate market may be like by the time you retire.
Paying down credit card debt as much as possible is also recommended. If you do take out loans during this time, make sure they're scheduled to be paid off before your planned retirement age. Because your retirement income will likely be less than what you're currently earning at your job, even small amounts of consumer debt can potentially affect your budget for everyday expenses.
If you're like most people in their 50s, your children are grown and living in their own homes, which makes this an ideal time to downsize. One way of doing this is to sell your present home and purchase a smaller, less expensive property—this could even be the home you plan on living in after you retire. However, moving to a smaller home isn't in the cards for everyone in your position, and it certainly isn't the only way to downsize. Another way to cut costs is to rethink that new car you've been considering. If you can get a similar car that's a couple of years old without a great deal of mileage on it, you should be able to save a few thousand dollars. Cutting the cord and refusing to pay for expensive cable TV service in favor of cheaper streaming services saves many people at least $100 per month.
Amp Up Contributions to Your 401(k)
The Internal Revenue Service (IRS) puts an annual cap on how much you can contribute to your 401k and not have it subject to taxation. However, those 50 years of age and older are able to take advantage of a provision known as the catch-up contribution. The catch-up contribution allows taxpayers 50 and over to contribute an extra $6,000 per year to their 401(k)s.
If you haven't done this already—and you'd be surprised at the number of people your age who haven't—talk with your company's HR department about whether they have a program designed to match or at least contribute to your 410(k). Many companies have these policies in place yet don't make them widely known.
Get Help From the Experts
Whether you're just starting out on your road to devise a workable financial retirement plan or have been saving for years, professional guidance from the experts is an excellent way to make sure you're on the right track. Wealth management advisors provide the knowledge, expertise, and objective eye necessary to ensure optimal performance of your financial portfolio. An expert helps clients set realistic goals as well as helping them avoid common mistakes made by fledgling investors, such as making emotion-based decisions concerning investment and savings strategies. Contact a company that offers wealth management services to learn more.