Here are seven smart moves that couples in their 50s can take to prepare for retirement:
- Asses what retirement will cost: Mapping out a rough budget and plugging those numbers into a retirement calculator can help determine if you will have enough in savings to support your intended lifestyle.
- Boost savings at age 50: The tax code will allow individuals of 50 years of age and older to contribute an extra $6000 per year to a workplace retirement plan (such as a 401(k) plan). The rules also allow an extra $1000 per year to contribute to a traditional IRA.
- Consolidate accounts: Over time, the number of financial accounts a couple has opened may have increased. Combining them to fewer accounts eases the task of financial management and enhances the clarity of how investment dollars are allocated across both spouses’ accounts.
- Make your kids financially independent: A recent study in Money Magazine shows a research survey that slightly more 18-34-year-olds are living with their parents. Financially supporting adult children can hinder plans to save for retirement, leading to future financial problems for the parents.
- Use vacations to check out retirement locales: Those seeking to move to a different location in retirement should consider using vacations to try out that area first. When doing so, think about what life will be like regarding activates, socializing, and even climate. Plus, realize that spending a week or two in a place is a far different experience than actually living there.
- Make significant changes if behind on savings: Those who have not saved enough for retirement can boost savings by downsizing their home. The proceeds from selling the bigger house plus, the lower costs of, the smaller house can be used to increase retirement savings.
- Adopt a healthy lifestyle: Exercise and a proper diet can reduce the risk of illness and even reduce high medical bills as you age.
It is never too early or too late to start saving for retirement. Choosing to not plan, is planning to fail. Not sure how to start planning or want to get your taxes in a good place so that you can focus on your retirement plan? Just call Jack for tax help.