Finance in Your 50s: 6 Things to Consider and Take Care Of
Your 50s are considered the golden years of your life. Your kids are (hopefully) moved out so you can reclaim your house and your finances. Before you settle too comfortably into enjoying the first “me time” you have had in years, there are six things you should prepare for financially.
Start Planning for Retirement
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Financially, it is unwise to retire before you reach the age of 62, but that doesn’t mean you can’t start planning your retired life. Figuring out what you want to do when you retire will help you prepare for it financially. If you try to withdraw your retirement funds now, you may lose interest and tax benefits.
First, you need to get an exact idea of what your expenses will be after you retire. Think about the lifestyle you want to lead.This may include starting a new hobby, getting a vacation home, or traveling. Don’t forget to factor in health costs, since your health insurance is most likely going to increase over the years. Also remember that some things, such as mortgage costs, will decrease or disappear eventually.
Stop Accruing Debt
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There are many reasons you may feel compelled to take on more debt. The most common reason for people in their 50s is to help out their children or grandchildren with school or home loans. However, it is a better idea to put any excess money into your retirement account. Your family will have many, many years to pay off loans they take out. You only have ten years to pay off a loan before your retirement kicks in. All the money you paid to the loan could have been invested in your retirement instead.
Become More Physically Active
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Don’t use “being old” as an excuse to stop being active. Start going on walks every day and add an easy weight lifting routine to your workout. This is a financial step, because people who are active have lower annual medical costs. It also improves your chances of living longer by preventing heart disease, stroke, cancer, and diabetes.
Designate a Power of Attorney
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Even though you feel great now, your memory may start to go as you age. It is better to designate power of attorney now to a trusted individual, so they can manage everything in your life when you get older. Hiring an attorney now will also save your children the cost of hiring one when you are unable to do so. Visiting www.tailoredlegal.com can help you make such decisions and learn about other legal steps you should consider taking during your golden years.
Set Up a Will or Trust
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This is not a very exciting prospect. No one wants to think about where everything in their life needs to go after they die. No matter how little you think you have, it is best to set up a will to divide all of your assets out. You don’t want to put that extra stress on your children and family when they are trying to deal with the grief of losing you.
A great extra step to do is to set up a trust. A trust will guarantee your money is set aside for your children or grandchildren to receive when they reach a certain age. This helps portion your money out into smaller chunks, so your family does not spend it all at once. It is also great if you want to pay for the education of your children or grandchildren and want to make sure the money goes to that fund.
Consider long-term care insurance
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The life expectancy is gradually increasing. By the time you are 80, you might be projected to live for another 20 years. However, once you reach that older age, you will most likely need more health help. A long-term insurance care policy will cover ongoing medical costs when you start accruing them. This can include physical therapy, nursing home stays, and home healthcare visits. You need to consider this insurance because the premium cost may drastically increase by the time you need long-term care. You also might develop a preexisting condition that excludes you from insurance coverage.
Taking care of these financial tasks now while you are still able will allow you to enjoy your golden years with peace of mind.