- April 10, 2019
So you are 50 - Now is the time to get serious about Retirement
The big 5-0 is one of those birthdays that can make people take a serious look at the half-century behind them.
Passing that milestone also can bring on the realization that retirement - or whatever you choose to call that phase of life when full-time work is largely behind you - is no longer a distant concept. And if you haven't focused on that looming reality, it can be anxiety provoking.
Unfortunately many 50-somethings are ill-prepared for their golden years. The chart below gives you a good idea of how much you should have saved by now based on your current income.
How Much You Should Have Saved (in thousands of $):
SOURCE: J.P. Morgan Asset Management Assumptions
Remember, whatever amount you've saved will need to be combined with other sources of income in later life - i.e., NIB - and stretch across the remainder of your life.
Here are three areas of your financial life that take on new meaning in your 50s and can help you prepare for later years.
Give your savings a boost
The good news is that your 50s are an ideal time to increase your savings. At this point you could be hitting your peak earnings years and your expenses may be declining especially if you're empty nesters. If there's a gap between what you've saved and what you need, you've probably got another 10 or 15 years to fill it. Our advice, make savings a reflex action, set up an automatic transfer with your bank when your salary is deposited.
Taking a close look at where your money is going can help identify extra cash. It can be illuminating to see how much you're spending that you really could be saving.
Give your investment portfolio a checkup
If you haven't checked on exactly how your retirement savings is allocated among different investments, now's an important time to revisit your portfolio.
In your 50s, two things become more important: your risk tolerance - how well you stomach the value of your investments going up and down - and when you anticipate taking money from your portfolio. As you get closer to retirement you will want to put some money in fixed income investments and less in equity investments that can be more volatile.
Get rid of really bad debt
Just because you can qualify for two or three or more credit cards, that doesn't mean that you need them. In all practicality you only need one credit card. And that should be used for safety reasons when abroad or shopping online. If you have more than one, we suggest you cut up them up, but pay off any outstanding balances first and keep the one that offers the lowest interest rate and fees.
There's nothing wrong with taking vacations and buying gifts, as long you don't use plastic to pay for it and pay a huge interest rate.
Your future self will thank you.
If you're not sure you're on the right financial path contact me:
Cleora Farquharson
603 6045
cleora.farquharson@royalfidelity.com
Or call 356 9801 and make an appointment with a financial specialist at RF...TODAY!