There is something about turning fifty. Perhaps it’s because every old person joke suddenly hits too close to home or just the simple fact that you really are half a century old. But truly - your fifties may be the best years of your life. For most, being fifty means freedom. It means being an empty nester, being in the best earning years of our life and still having good health. If you look at it that way, fifty is awesome!
Fifty is also a defining time in your life. You get one last hurrah to help the old person you will be some day. All of those wonderful things that come with being fifty could be like a golden ticket to a successful retirement…if you so choose. Too many people take their fifties for granted and find out a little too late what they could have, and should have, done. Don’t let that be you.
How? Here are top five “Turning Fifty” tools.
#5…Play Catch-Up…Virtually every retirement plan out there has provisions for anyone age fifty or older to increase the amount they contribute. For a Plain-Jane IRA, the catch-up amount is one thousand dollars. For a 401(k), the catch-up amount is six thousand dollars.1 The government wants you to put more back and is willing to pay you for it. You lower your taxes and save more.
#4…Your Health May Be Your Wealth…Do you think taxes will be going up or down in the future? My guess is that you said “up.” Have you planned for it? Does your future allow for tax diversification? Believe it or not, your health at fifty may give you an avenue to create TAX-FREE income in retirement. Every year you wait, this opportunity shrinks and may even go away with one bad doctor’s visit.
#3…Liquify…Too many retirees today have very little to no liquid money outside their retirement accounts. This can be a very dangerous tax bomb. Cash is king, but for some reason we forget that in our fifties. Chances are your cash flow is better now than ever and it may be your best opportunity to create cash reserves — money you can always get to if any opportunity crosses your path, an emergency comes your way, or times just get tough.
#2…Practice Retirement…Retirement is different for everyone, but everyone needs the same objective: Your plan cannot be to simply “retire from” something. You need a plan to “retire to” something. What better time than now, before you are burnt out, to figure it out? And this has one more tremendous benefit…maybe even a priceless benefit. If you know what retirement will need to look like, you will know what it will take to fund it. Imagine…retiring stress-free…now that’s a thought!
#1…A Dollar Should Not Cost A Dollar…Too many times we look at the price of something and procrastinate or just give up. What if I were to tell you that creating a successful retirement may not require you to put up every dollar you will need? People that plan early get this. People that plan early have the opportunity to have every dollar working for them and their retirement whether or not they actually earned all of them.
You have two choices on top of the age hill: You can take your freedom, enjoy it, spend it, and live large over the next few years… but just know that the consequence may be living with the crumbs for the rest of your life. Or you can take your freedom, use it strategically, and allow it help you live Life on purpose, retire successfully and stay successfully retired. The choice is yours. What road will you choose?