Are you patiently waiting for your retirement? As many of us who are approaching our pre-retirement years know, the closer we get the longer our retirement years seem to take to arrive. Some days, it can feel as slow and painful as watching grass grow, which can make it easier to quickly lose interest in planning for this important life stage.
Whether you are paying close attention to your retirement years or you’re somewhere off in the clouds due to loss of interest in it altogether, those years are going to be here in no time. Instead, why not be more prepared when they do arrive rather than waste away your top earning years?
None of us has any idea how long we’re going to live. However, what we do know is that over the past 50 years, the average life expectancy has significantly increased. We have advances in medical technology along with the ever-increasing interest and awareness in healthier living to thank. With that in mind, an essential part of our retirement plan should include savings that will last longer than we expect to live.
The demand for financial planners and advisors continues to increase as people tend to expect that they may live longer, and many people just feel unprepared in general. If you’ve got a savings plan in place, great, but what about a retirement plan? You know, a plan that includes your expenses, both expected and unexpected, along with a budget.
Many people in their 50s have the savings aspect down to a science, but few have taken a closer look at what their retirement years may look like, or what they would like them to look like, which means they may end up missing the mark when the time comes to hang up their work boots or hat for good. If you’re in your 50s or about to approach these years, here are 3 ways you may be able to put your retirement plan into drive and possibly even autopilot – if you make the right decisions, of course.
Try Maximizing your Contributions
Since our 50s are typically our prime earning years, these years present one major opportunity for retirement planning and giving our plan a boost. Typically, people at this time in their lives have a low amount of debt and a higher salary, which means maximizing contributions should be significantly easier to do during this period of time.
If you are not entirely sure how to give your contributions and savings account more of a boost, you may want to talk with an advisor or find a financial planner in your area to consult with on the matter. Not everyone is a financial or retirement expert, so talking with an experienced professional could really pay off for anyone who may be unsure of where to begin.
Find the Right Balance Between Wealth Creation and Wealth Preservation
One of the unique challenges for people in their 50s is that they tend to want to get as much growth out of any existing investments as possible. While on the other hand, they want to take more risk with any accumulated savings to help them live well in their upcoming retirement.
This often causes a lot of people unnecessary stress and has even caused some people to lose all or most of everything they’ve worked hard to save. Why? It’s not that this approach is wrong, as it is quite common, but too many people approach it the wrong way. They tend to feel desperate and are easily taken advantage of or they think they know what they are doing and take extremely high risks. There are a lot of schemes out there as well and many people easily fall for them.
If a 20-something individual takes high risks and high losses, they have the time and the opportunity to recover, but a person in their 50s does not. Or, they have very little time to make up for any ground they may have lost. In a case where a person may want to start investing, it is best to consult with an advisor before proceeding. In general, advisors and planners have the experience and know-how to help ensure clients don’t make these common mistakes.
A seasoned investor may have the confidence and skill to keep the balance, but if that does not sound like you, sit down with a professional to make sure you are on the right track or to help you get back on it.
Getting advice about wealth creation strategies at this stage of life can help prevent costly errors.
Seriously Consider Your Retirement Lifestyle
When you put your plan together, you really want to have a clear grasp of what you would like your retirement years to look like. You may want to factor in things like where you will live and how much it will cost, if you plan on traveling, how you plan on spending your time, if you will have any dependents, overall living expenses, and income sources.
Other things to think about factoring in, as mentioned in one of our previous posts, include taxes, inflation, possible healthcare costs, estate planning, and any possible debt you may end up carrying with you. Basically, anything and everything possible that could or will end up costing you money should all be factored into your overall lifestyle plan.
It is a lot to take in, especially if you’ve barely scratched the surface of your plan. However, working with the right professionals will surely help you take a closer look at your entire financial picture, both present and future, so you can start putting together a strong retirement plan today.
Talk with one of Ethica’s financial planners to schedule your free consultation so they can help you assess your personal situation. They will provide you with some options on how you may be able to give your retirement fund a boost while you are in your prime earning years.