Retirement planning in your 50s takes vigilance and commitment, especially for those whose who, for whatever reason, have taken their eyes off the retirement prize.
Retirement planning in your 50s takes vigilance and commitment, especially for those whose who, for whatever reason, have taken their eyes off the retirement prize. Ongoing research of affluent investors conducted by Spectrem’s Millionaire Corner finds that “not saving enough for retirement” is the top financial regret for investors in their 40s and 50s.
Concerns about retirement tend to increase with age. In a 2013 wealth level study of Millionaire households, 54 percent of those ages 44 and under expressed concern about being able to retire as planned, compared with 60 percent of those ages 45-54.
Experts estimate that retirees will need between 70 percent and 80 percent of their pre-retirement income to maintain their standard of living, according to the U.S. Department of Labor or DOL. Lower income earners may need 90 percent or more of their current income. Because of longer life expectancy, retirement savings will have to last longer.
If you are planning for retirement in your 50s, experts recommend several self-directed steps you can do to make sure you are on track to reach your retirement goals (or help you help set them): Among the simplest to you get you started are:
· If you have not done so, use a free online retirement calculator to determine how much money you will need in retirement to maintain your lifestyle. Identify your sources of retirement income and assess what your monthly expenses will be.
· Review your financial plan to make sure it remains a good fit. (If you don’t have a financial plan, make one) Nearly half (48 percent) of Millionaire investors surveyed by Spectrem’s Millionaire Corner said they have received advice about a written financial plan from their primary advisor, but one-third said they did not need this type of advice. Just over half (53 percent) report their financial advisor reviews their plan with them at least semi-annually, while almost one-third (32 percent) review their plan with their advisor annually.
· If you are at least age 50, you can make “catch-up contributions” of up to $5,500 to your IRA or 401(k). behind in your retirement savings,
· Re-evaluate how your retirement plan money is invested. As one gets closer to retirement, investments tend to become more conservative to protect the principal.
· Conduct independent research. Financial literacy has been shown to correlate with positive financial behavior. Those most confident about their financial knowledge are most likely to have emergency funds and less likely to run up credit card debt, studies find. A Millionaire Corner survey conducted last May found that investors who consider themselves “very knowledgeable” are most likely to indicate they’re “very-well informed” about the workings of Social Security and when to start receiving benefits (81 percent). Half of investors who say they have “little or no knowledge” feel well informed about the timing of benefits. The most knowledgeable group is also more likely than the least knowledgeable to delay taking Social Security benefits to maximize retirement income (42 percent vs. 33 percent).
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.