Pre-Retirement Planning

Pre-Retirement Planning

For many people, their 50s are a time of transition. During this unique decade, you will probably have found your ideal career niche, your children will begin to leave the house, and your golden years will start beckoning to you with promises of a life of relaxation. However, your 50s are also the time when you should begin to actively fortify your retirement. Fortunately, the following five tips will help you to effectively prepare for a financially and stress-free retirement.

#1. Use Your Catch-ups. 
Did you know that during your 50s, the U.S. federal government offers “catch-up” opportunities? For example, you can contribute an additional $1,000 each year to your IRA once you reach the age of 50. You can also contribute an additional $6,000 every year to your 401k as soon as your 40s are over. Finally, once you have reached your 56th birthday, you will be able to make an additional $1,000 annual contribution to your health savings account. In other words, during your 50s the federal government offers you numerous opportunities to save additional money for your upcoming retirement.

#2. Prepare For Social Security.
Social security can be a great source of income throughout your retirement. With this in mind, it is important that you understand how social security will impact your finances. For example, if you wait until you are 70 to accept your social security, then you can typically increase your annual income by an additional eight percent. However, if you want to delay accepting your social security, then you need to spend time during your 50s ensuring that you have the resources needed to live comfortably.

#3. Lower Or Eliminate Your Debt.
According to the Consumer Financial Protection Bureau, as many as 30 percent of homeowners ages 65 and older still have mortgage debt. In fact, a lingering mortgage is one of the biggest debt hurdles that many people in their 50s still have to overcome. The good news is that by eliminating other areas of debt, such as credit card debt, you can spend your 50s focusing on paying-off your mortgage and thus lowering your financial stressors before you begin your retirement.

#4. Lower Unnecessary Costs.
One of the easiest ways to lower debt and save more money is to spend less. With this in mind, during your 50s you want to get a good handle on your spending habits, so that you can more effectively create an accurate retirement budget. The good news is that with the help of retirement planning seminars you can learn how to lower unnecessary costs before you enter your golden years. Finally, by lowering unnecessary costs, you can free-up the funds needed to take advantage of catch-ups by contributing additional funds to your 401k and IRA accounts.

#5. Attend A Retirement Workshop.
When you are in your 30s and 40s, retirement might seem like it is incredibly far away. However, as you enter your 50s retirement can suddenly seem like it is looming closer. The good news is that by attending a retirement workshop, you can learn the retirement tax strategies, investment tips, and the financial planning strategies that you need to enjoy a stress-free and comfortable retirement. To learn more about how you can effectively prepare for your retirement in your 50s, attend a Fortified Retirement financial planning workshop today.

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