Strategies for Building Wealth in Your 50s
Now is The Time to Strengthen Your Finances and Finalize Your Retirement Plans
While it’s true that it’s better to begin saving earlier rather than later, it’s not too late to start building wealth in your 50s. In this decade of life, there are still smart moves you can make to help strengthen and grow your finances. If course, as you get closer to retirement, the financial choices you make begin to carry more weight, so how you save and invest during this decade of your life will directly affect what your life looks like in retirement.
Below are six moves you can make in your 50s to build your wealth and better prepare yourself for retirement.
Build a Budget for Retirement
One of the most crucial aspects of proper money management in any decade of life is having a budget that appropriately reflects your financial reality and future goals. You’ll want to start by looking at how much you have saved for retirement, along with how your income and expenses are going to look as you get closer to that next phase of life. Don’t forget to factor in healthcare expenses as they’re one of the biggest roadblocks to financial security that retirees face. If your savings is still lacking, look at where you might be able to cut out some unnecessary spending in your life – now is really the time to singularly focus on saving as much as you can for the next stage of your life.
Eliminate Any Lingering Debt
While you’re still working and have a steady income that you can depend on, now is a good time to tackle your debts so that you can leave that financial stress behind once you retire. It’s financially savvy to start with your higher balances and any debts that have high interest rates. And while that’s a good idea, it may help you stay motivated to start with your smaller balances instead. Being able to watch yourself cross off debts one at a time can give you the motivation and confidence you need to finally face those larger balances. Whatever avenue you choose to take to stamp out your debts, what matters is that you stay committed to eliminating as much of them as possible before you leave the workforce.
Beef Up Your Retirement Accounts
With decades of work behind you, chances are you’ve been putting some money away into your retirement accounts consistently. Now that you’re in your 50s though, it’s time to maximize your contributions and get as much as you can out of compounding interest. So, start maxing out your 401(k), 403(b) and other retirement savings accounts. Once you hit age 50, you’re able to contribute an additional $1,000 into your IRAs, which can be a great super boost to your savings, too.
Rebalance Your Portfolio
As a young investor, taking more risks with your investments is smart, and it can be exciting, too. However, the closer you get to retirement the more you’re going to want to begin scaling back the risk in your portfolio. After all, you’re going to need to depend on that money to provide you with an income stream once you no longer have traditional paychecks. Take some time to review your portfolio and pull your money out of your riskier stocks to invest them into ones that are more stable. You’ll also want to be sure that your investments are properly diversified so that you don’t have all of your eggs in one proverbial basket.
Concluding Thoughts on Building Wealth in Your 50s
You can make smart retirement planning moves at any stage of life, but your 50s are the time to be sure that you have a firm grasp on your plans, and you know what steps to take before you finally say goodbye to your working life. If you’re not where you think you should be on your savings journey, that’s okay – you still have time make progress toward building wealth in your 50s. You just have to be diligent and intentional about it. The above tips are meant to help you boost your finances and bring you closer to accomplishing your money goals for retirement.
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Most of the advice surrounding retirement planning pertains to the financial aspects, like creating reliable income streams and devising a Social Security strategy. These are certainly crucial planning considerations, but there’s more to retiring than making smart money moves.