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5 Things to Do in Your 50s

If you are one of the many people who start getting serious about their finances as they reach their 50s, enjoy this guide for your next steps.

By Kara Brockmeier, CFP

Many financial planning articles are geared towards people starting out, or those nearing retirement. But what about people in their 50s? They need help, too! In fact, many times people start getting serious about their finances when they reach their 50s – their children are finally off to college, they have more time to think about their future, or they are on their second or third career and have old employer plans but no idea what to do with them.

As a CERTIFIED FINANCIAL PLANNER™ professional, Kara strives to help you set and pursue your unique life goals. Kara became a financial planner after realizing she wanted to work with clients the same way she discusses money with her friends–in a fun and relatable way.

Kara Brockmeier

A lot of times, the fear of not getting started at a “young” age prevents people from ever getting started in the first place. The key is to take that first step and get started. The past is the past and it is time to focus on the future.

So, whether you were financial savvy in your 20s or are just getting started in your 50s, here are 5 simple action items for those 50-somethings:

  1. Maximize your retirement plan. When you turn 50, the Internal Revenue Service (IRS) allows you to contribute more to your retirement accounts each year. The IRS calls these “catch-up contributions.” If you have the cash flow available, make sure you are taking advantage of these extra catch-up amounts. Doing this now versus ten years from now could really make an impact in your overall financial situation and get you on the right path to retirement. 
  2. Fund a Health Savings Account (HSA). If you are eligible for an HSA, you should contribute to it! Even a small amount each year will make a difference. You can also invest the funds that you don’t plan on using soon for qualified medical expenses, so they have an opportunity to grow over time. Health care expenses are increasing, and this is a great way to plan for those increasing costs. 
  3. Think about long-term care. Chances are you know someone who has been impacted by or needed long-term care. If that is something that worries you, begin thinking about purchasing insurance to mitigate the risk of paying out of pocket for these expenses. Age 55-60 is really a sweet spot for purchasing a policy as they tend to be less expensive than purchasing one in your late 60s. Talk to a financial professional about your specific need for long-term care insurance in your 50s to feel more confident about a possible need for long-term care. 
  4. Re-visit your estate planning documents. Do you have children? If you don’t have children, where will your money go if you are no longer around? Do you want to gift to charity? These are questions that you may have been asked if you already have estate planning documents. Have these answers changed? Laws have certainly changed over the years.
    A good rule of thumb is to re-visit your estate planning documents every five to ten years to make sure they are written for current laws. You also want to make sure if something happened to you, that your money and belongings will go to the people you love the most. A lot of times people in their 50s have children that are responsible enough to inherit money and assets without certain stipulations. So, it is a good idea to speak with your attorney or legal professional to re-visit these scenarios. 
  5. Toss the “stuff” and focus on experiences. This really isn’t finance-related, but it is important enough to mention. Talk to your children, family members and those that care about you. Do they want to sift through boxes of old pictures, silverware sets, or autographed baseballs 50 years from now? Or do they prefer you keep what is most valuable and toss the rest? Instead of spending money on keepsake items, start spending it on trips with the family or meaningful experiences that your loved ones will cherish for a lifetime. Another thing you could do is donate to a charity that fulfills you instead of buying that hottest new item that *could* be worth money in the future. You get the picture.

Your 50s can be a unique time. You begin to think about what your next chapter holds and start visualizing what retirement may look like for you. You aren’t alone and small steps will really make a difference in the long run. So, it doesn’t matter whether it’s your first step or your next step. All that matters is that you take a step. Cheers to your 50s!

About the author: Kara Brockmeier, CFP®

As a CERTIFIED FINANCIAL PLANNER™ professional, Kara strives to help you set and pursue your unique life goals. Kara became a financial planner after realizing she wanted to work with clients the same way she discusses money with her friends–in a fun and relatable way.