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How to Prepare for Retirement in Your 50s

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It’s important to prepare for retirement, whether it’s right around the corner or decades away. Decide what you plan to do in retirement and therefore how much money you’ll need in your retirement fund. What’s your H.E.A number? Do you have lofty goals of traveling, pursuing hobbies, and living in a grand home? Or do you plan to have a modest retirement, possibly downsizing to a smaller home and continuing to work into your retirement years?

Once you know what your goals are, prioritize how you will save to fund those goals, and how you will spend the savings when the time comes. Remember, retirement can last 20-30 years, so it’s important to be prepared financially.

Below are some recommendations for preparing for retirement in your 50s. Be sure to read our related posts on preparing for retirement at every age.


How to prepare for retirement in your 50s


Reevaluate your investments.

Make sure your investments are helping you move closer to your goals, not hurting your progress. Your priorities may have changed and you may need to shift focus to preserving your wealth as much as growing it.


Assess your progress.

If you’re not on track for your retirement goals, cut back on expenses as much as possible and consider looking for additional income, such as renting out a room in your home.


Max out your contributions.

Contribute the maximum allowable amount to your retirement accounts each year. Once you reach age 50, you can make additional catch-up contributions. In 2024, you can make an additional $7,500 annual contribution to a 401k, for example, or $1,000 for an IRA.


Pay off debt.

Prioritize paying off your mortgage and getting out of debt before retirement. Fixed income dollars in retirement will go much further if they are not going toward debt and interest costs.


Consider an HSA.

A health savings account is a tax-advantaged way to save for medical costs. Money in an HSA grows tax-free when it’s used for medical expenses, and it can continue compounding until you need it in retirement.



Top Tip:

No matter your age, the most important thing you can do to be financially prepared for retirement is save money. The earlier you start, the better, but it’s never too late. Starting today is better than starting tomorrow.

Sources: Department of Labor, Ameriprise, CNBC, Bank of America, Investopedia, IRS, Fidelity


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