(This article previously appeared on Policygenius.com.)
If you’re about to hit 50 and wondering if and when you may ever be able to retire, you’re not alone. As a general rule, regardless of how much or little you have in savings and how much you have in debt, doing something now, having a plan and sticking to it are the most important things you can do to ensure you’ll be able to retire at some point.
“Regardless of age, there is always time to save for our future,” said Tyler Landes, a Certified Financial Planner and founder of Tandem Financial Guidance in Kansas City, Mo. “We tend to see retirement as the end-point for investing, and we think if we haven’t saved by now then what’s the point? But retirement isn’t the end, and if we’re lucky, our money will need to last 30 years or more. Even money saved late in the game can have a significant effect years down the road.”
11 Ways to Retire at 67
Here are 11 things to do to ensure you’ll be able to retire while you’re still young enough to enjoy i:.
1. Pay off your debt. Financial advisers say the most important thing at any point in your financial life is to pay off your debts and do so as soon as possible. That’s especially important as you enter your 50s because you’re getting close to retirement age and you’ll want to be able to save every penny possible for the future.
2. Create a budget and stick to it. If you don’t have a budget in place, create one. You aren’t going to be able to successfully pay off debt and save for retirement unless you know exactly what your monthly cash flow looks like. Grab a pen and paper or sit down at your computer and lay it all out in black and white. Be honest. Consider every last cent you spend each month and account for it.
Only then can you see exactly where you can cut back, make corrections and get your finances in order.
3. Pay off your mortgage … If you are still paying your mortgage, you may want to consider making additional payments so you can pay off your remaining balance sooner. Having your home paid off can be a great asset in retirement.
4. … or downsize You can also consider moving into something smaller and more efficient, particularly if you have more house than you actually need. This can be an especially good idea if you don’t own your home, because you can put more of your monthly budget toward savings.
5. Max out your contributions … If you aren’t already contributing the maximum amount to your 401(k) ($18,500 for 2018 if you’re under 50) and taking advantage of any employer contributions your company may offer, it’s time to start doing so.
6. … and start making catch-up contributions You’ll also want to take advantage of the increased amount of $6,000 you can contribute to your 401(k), 403(b) or 457 beginning at age 50. So, for 2018, you can invest up to $24,500 if you’re 50 or older.
7. The same goes for your Individual Retirement Account (IRA). If you don’t have an IRA, it’s a good time to consider one. Like your 401(k), your IRA also allows for catch-up contributions beginning at age 50. You can increase your annual contributions from the standard maximum of $5,500 in 2018 to $6,500 if you’re 50 or older.
8. Have a plan B. Things happen. In 2008, when global markets tanked, a lot of people on the verge of retirement had to rethink things, and quickly. Even if you think you’re on track to have enough saved to retire at 65, it’s good to have a backup plan. Will you continue to work at your current job? Start your own business? Work part-time? Sell your home and live off the proceeds? And if you do leave your current employer, will you have enough to pay for any additional health insurance needs you may have?
Think about what you want in your retirement years and make sure you have a fallback option in case things don’t go quite the way you planned.
9. Use your hobbies to create income. Part of your backup plan can be coming up with a creative income strategy for your retirement. Do you love photography? Consider setting up a portraiture business, covering local sporting events or selling your landscapes through an online marketplace like Etsy. Do woodworking in your spare time? Consider selling your creations. Are you an expert in some field? Consider teaching as an adjunct professor at a local college. On a fixed income in retirement, these things can generate enough to keep you comfortable while also keeping your body and mind engaged.
10. Have a Social Security strategy. People can start taking Social Security benefits beginning at 62, but if you were born after 1960, you won’t get your full benefits until you reach 67. For those who need their benefits at 62, that means they’ll only ever receive about 70 percent of their annual benefit.
There is, of course, also the possibility that Social Security benefits, as we currently understand them, may be dramatically different or non-existent by then. That’s why it’s important to have your own savings. In particular, it’s important that you …
11. Talk to a financial adviser. Just like you probably wouldn’t try to build your own home from the foundation up, you may not want to go it alone when to build your retirement savings.
There are lots of financial advisers who offer free consultations, and the guidance they are able to provide for your finances and investments can more than pay for any fees they charge.
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- The Retirement Risks You Can’t Predict
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