Retirement Planning For Your 50’s

These days, white strands and retirement planning are natural parts of aging. Having a plan laid out can help you enjoy your golden years.

In 1970, Andy Williams serenaded us with, “Where do I begin?” And fifty years later, the words still hold true.

Have you planned for your retirement plan yet? If yes, congratulations! But if you shook your head despondently, know that the IRA thinks it's never too late.

Here's what you need to know about retirement planning.

RELATED: Your Retirement Years 

Your Beginner's Guide to Planning for Retirement

1. Create a Timeline

When do you want to retire? In 10 years? Twenty years? Or are your bones aching to retire as soon as possible?

A rough timeline will help you map out your retirement plans. And a well-laid-out plan could help you retire on time.

If you have plenty of time before retirement, you will have more time to save. And if you want to continue working for a couple more years, you may not have to save up as much for retirement.

On the contrary, if you want to retire early, you may have some catching up to do.

2. Take Advantage of Government Benefits and Contributions

So, you have a retirement plan but want to pool a bit more cash for your retirement.

A catch-up contribution is a benefit for those over 50, allowing them to contribute more than the standard limit.

You may apply for catch-up contributions to the following plans below:

• 401(k) plan
• 403(b) plan
• governmental 457(b) plan
• SARSEP
• SIMPLE-401(k)
• SIMPLE-IRA

Different savings plans have different limits and max catch-up contributions.

For example, according to the IRS, the contribution limit of 401(k), 403(b), the majority of 457 plans, and the Thrift Savings Plan is $19,500. And the max catch-up contribution you can make to your plans is $6,500. If you max out your contributions, it would bump it up to $26,000.

Note that the IRS may change based on the cost of living.

If at this age, you've reached the top of the career ladder, consider taking advantage of this benefit. A heftier savings fund can give you peace of mind and a comfortable lifestyle in your retirement years.

3. Take a Look at Your Cash Flow

Take a look at your earnings, savings, and expenses. What expenses will you be expecting over your retirement years? Is your wallet filled with credit cards or gym or club memberships?

Also, consider if you have family living with you. If it's just you and your spouse, you may not need to put away as much. However, if you're paying for your kid's tuition fees, you may want to bolster your savings plans and maybe work a few more years.

Downsize your home if your kids have left the nest, and maintaining a large home is eating at your savings.

The goal is to make sure that after taking into consideration all of your fixed and variable expenses, you have enough to live a cushy life. This is what your retirement years are for after all.

4. Retirement Planning Includes Working Out Your Income

You've left the office, but it doesn't mean that your earnings plateau as well.

An entrepreneurial spirit doesn't fizzle with retirement. Take advantage of this skill and find another source of income. Start a business with some of your pals. Your wealth of experience at the office can help you.

But if you have your heart set on spending whole afternoons on your new recliner, maybe a passive income may be ideal.

5. Sort Out Your Investments

Bump up your savings with investments.

Invest in real estate and let your money earn for you.

Review all the investments you have now. Your investment preference may have changed over the years, and so should your portfolio.

Don't put all your eggs in one basket. And make sure that each basket is conservative and secure.

Refocus on safer investments, prioritizing bonds over stocks and money markets. The ratio may depend on your income level, but try to keep the majority of your money on bonds.

RELATED: 9 Keys To A Happy Retirement

6. Double Down on Your Debts

The best way to keep a positive cash flow? Crush your debts.

Debt can consume your income and take away the savings that could have gone to a catch-up contribution.

On top of living expenses and your holiday fund, consider that your withdrawals will be taxed. Taxes, on top of these expenses, will bring down your savings. Removing your debts out of the equation can lighten the burden on your shoulders and savings plans.

You may ask for tax help from the IRS. A certified volunteer might be able to give you a rough estimate of the tax range you can expect to pay.

7. Keep an Emergency Fund

An emergency fund is different from your retirement savings plans.

The purpose of an emergency fund is in the name. Your retirement savings plans may help keep you afloat during your golden years. But maintaining an emergency fund guarantees you stay afloat on rainy days.

Build an emergency fund that can last you for a couple of months. How much you set aside will depend on your living expenses and how much of your earnings you can afford to stash away.

8. Get Long-Term Care Insurance

In your advanced year, it pays to put a premium on your health.

While your retirement savings plans fund your daily living expenses and family trips, long-term care is dedicated to preserving your health.

According to the AARP, 25% of seniors 65 and above spend more than $50,000 in healthcare expenses. Applying for long-term care insurance may protect your retirement savings from going towards medical bills.

9. Move to a Retiree-Friendly State

Different states have different tax rules and regulations. Some states are more lenient than others.

There are some states that don't tax social security benefits or pension payments. They may even be exempt from your taxable income.

Moving to a retiree-friendly state could be a financially strategic move that will help you keep most of your earnings intact. If you're still working, then you may be interested to find that some states do not impose an income tax.

I hear Florida and Alaska are perfect this time of year—your golden ones.

10. The Conclusion of Retirement Planning: Mark Your Calendar for Your 72nd Birthday

Your retirement road map will hit its milestone on your 72nd birthday.

When you reach 72 years of age, you need to start making withdrawals yearly.

Required minimum distributions, or withdrawals, set the lowest limit you can withdraw every year.

The IRS provides worksheets that could help you determine your required minimum distributions.

Can I Get Assistance with Retirement Planning?

Spreadsheets and financial statements aren't everyone's cup of tea.

Seek the assistance of financial advisors or professionals. The tax system can be complex, and navigating them can make your retirement seem more stressful. A financial advisor can help you avoid certain taxes (legally) and hit your target retirement age with your target savings.

The IRS also offers tax help for those who:

• are over 50 years of age
• earn less than $57,000 yearly
• have a disability
• have trouble speaking English

The consultants are IRS-certified and are the best persons to ask questions about pensions and planning for retirement.

Check out this video for more info on planning for retirement:

Dedicate your 50s to sorting out your retirement plans. Just set your target retirement date may give you something to look forward to.

Seek help from IRS-certified specialists, financial advisors, or other professionals if numbers and spreadsheets are intimidating. It's understandable. The tax tables and changing rules and regulations can be difficult to grasp and keep up with.

But no matter how tedious a task it may seem, retirement planning is vital for your golden years to glimmer platinum.

What matters most is that you take the first step.

Are you planning for retirement or do you just want to retire from planning? Did this article help allay some of your worries? Let us know in the comments section below.

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