Planning for retirement should start at a very young age. This gives you enough time to set aside enough funds for the future when you’re no longer working. However, due to some circumstances, some people only start saving when they reach their 50s. It still isn’t too late, though, because they still have time to save money and achieve their dream retirement. If you’re wondering how to save for retirement in your 50s, here are a few tips that might help:
Clear Out Your Debts
One of the first things you need to do if you plan to save up for retirement in your 50s is to start paying off your debts. Focus on clearing out your mortgage and other unpaid balances, like credit cards and car loans. Once you’re already out of debt, try not to accumulate any more. This way, you can start saving more and maybe even invest some money in the stock market.
Put More Money in Your 401(k) Plan
If you follow the standard career progression, being in your 50s means you’re earning more money than ever before. This means you can increase your contributions to your 401(k) plan. Doing so has plenty of benefits, such as:
- Automatic Savings – In most cases, your 401(k) investments will automatically be deducted from your monthly salary. All the money you saved will be stashed in your account, which you can withdraw after you retire.
- Tax Deferment – All the money you put in your 401(k) savings won’t be taxed until you withdraw it post-retirement. There are even plans which can be tax-free.
- Catch-Up Contributions – If you’re in your 50s, catch-up contributions will become an option. The contribution limit for your account significantly increases, so you can definitely increase your savings.
Reassess Your Investment Portfolio
The investment portfolio for a 50-year-old individual should lean towards the conservative side. This means you should allocate more funds into bonds and less into stocks. After all, if the stock market fluctuates against your favor, you can no longer wait many years for it to improve again and increase the value of your assets. In a worst-case scenario, you may have no other choice but to sell your stocks at a low price.
Speak With a Financial Planning Expert
If you’re still at a loss on how to save for retirement in your 50s, it’s time to speak with experts. Financial advisors at Lamkin Wealth Management can offer professional assistance and help you with your retirement savings. Get in touch with us today to learn about the services we offer.