In Your 50's? Time to Start Planning for Retirement. Here's How.

What to do when planning for retirement in your 50's.

mature couple with map exploring city
In your fifties? Time to make a plan.. Rolf Bruderer/Blend Images/Getty Images

In your 40’s retirement seems far way. In your 50’s you can see it on the horizon.

This is one of many reasons people get serious about planning for their retirement in their 50's. This is the time to take a thorough look at your future and how you can best plan for it. Lay out a road map using the six steps below. Then take it one step at a time.

1. Run projections using retirement calculators

If you haven’t done any type of retirement projections start to play around with online retirement calculators that help you figure out how much income you might have in retirement given your current amount of savings and investments.

Caution: Free online calculators give you a good broad overview of the relevant components of your retirement planning. They are based on assumptions. You know the old saying, garbage in, garbage out. Most online retirement calculator do not accurately account for taxes. This can make a big difference in the results. If you do not feel confident about the input required you may want to seek a competent retirement planner to assist.

2. Get a handle on spending

No one wants to hear it, but you can’t get around the truth. The fastest way to save more is to spend less. Building a lower cost lifestyle allows you to save more now, and it means you’ll need to have less saved to maintain your standard of living in retirement. You can start getting a good handle on your spending habits by completing a retirement budget worksheet

Caution: If you plan on retiring before you reach Medicare age take a close look at estimated healthcare costs in retirement before you make any permanent plans.

Healthcare costs can be far costlier than you might expect.

3. Educate yourself

You are more likely to achieve your goals when you understand the choices available. You can read books, subscribe to finance magazines and attend classes to start learning about ways to invest in a smarter way and save more for retirement.

You’ll also want to get a heads up on the rules about retirement accounts and how the rules change as you reach specific ages

Caution: Online content, books and classes are all great resources, but it can still be difficult to determine which advice applies to your situation and which does not. Seek professional help from a retirement planner or specialist to double check your decisions.

4. Focus on your career

Finding work you enjoy might be the perfect solution. When you enjoy what you are doing, you’ll want to stay in the workforce longer. For most, your earning power is one of the biggest assets you have. Don’t be too quick to let this valuable asset go. If you’re not the career type look for ways you can earn extra money using hobbies and skills that you have.

Caution: If you are insistent on retiring in your 50's check out keep in mind you'll have a much longer time horizon to plan for. You may need funds to last 40 or 50 years, rather than 20 or 30. That means you'll have to save a lot more.

5. Invest and save, don’t speculate

You need to count on your retirement money to be there for you. Now is not the time to speculate. Learn what it means to build a portfolio - then build one that is appropriate for your goals. Don't rely on "investment experts" who make unrealistic promises. That will only leave you in worse shape.

Caution: There is no such thing as a free lunch or a perfect investment. Nothing offers absolute safety with no risk. Even with safe investments you run the risk that your rate of return will be less than inflation and you will lose purchasing power over time. Your best option is to create a mix of investments with different levels of investment risk.

6. Review regularly

The more often you look at your finances the more likely you are to make progress. Consider working your way through a retirement planning checklist. Once you’ve gotten all the way through the list, conduct an annual review by starting at the top and working your way back down the list updating things as you go.

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