Creating a Financial Plan
Have you hit the half-century mark yet? Considering that the average American retires at age 63, you could be closing in on that next chapter.1 “It’s the next big thing on the horizon,” says Greg McBride, chief financial analyst at Bankrate.com.
Here are three suggestions to help you reach your goal of a secure retirement:
1. Determine the Amount You’ll Need in Retirement Savings
Your 50s are the homestretch of your retirement savings journey, so now is the time to assess your progress and determine a savings goal if you haven’t already done so.
Unfortunately, many workers skip this step. Only four in 10 have calculated how much money they will need to live comfortably in retirement, according to the Employee Benefit Research Institute. You don't want to hit 60 and discover you haven’t saved enough.
“You want to say, ‘Here’s what my retirement lifestyle will cost, and here’s how much income my financial resources can be expected to generate. How do they match up?’” says Roger Wohlner, a financial advisor and founder of The Chicago Financial Planner blog.
A retirement planning calculator can help. By answering a few basic questions you’ll get a picture of how much money you’re likely to need in retirement to achieve your desired lifestyle and whether you’re on the right path. Additionally, creating a retirement roadmap can illustrate how adjusting your savings plan might help you get closer to your target.
2. Play Catch-up
If you feel you're behind on retirement savings, you’re not alone. In a survey of 700 affluent investors, Investopedia found that 52% believe their retirement savings are inadequate, and many worry about being able to retire on time. There are a number of things you can do, however, to gain some ground.
3. Start Planning for Long-term Care Needs
Over half of Americans age 65 will need long-term care at some point in their lives.2 Your 50s is a good time to begin preparing for it. If you're thinking of purchasing long-term care insurance, be aware that premiums typically increase as you age. There's also a greater chance of being turned down completely due to health concerns as you get older.
“Even if you don’t buy something now, it’s a good time to start investigating,” adds Hans. “You have options today that you may not have when you’re in your 60s.”
What's next: 3 Smart Money Moves in Your 60s
1"The Average Retirement Age in Every State in 2016." SmartAsset, 2017.
2"Long-Term Services and Supports for Older Americans: Risks and Financing Research Brief." U.S. Department of Health and Human Services, 2016.
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