Financial Planning in Your 50s - Adviser Investments

Financial Planning in Your 50s

March 19, 2021

Raising a family and building your career is enough to keep most people plenty busy—so much so that many don’t take financial planning seriously until their 50s, when they first see their retirement horizon approaching.

If you are in your 50s, here are five tips to make sure that you’re preparing properly for that next big financial milestone. (If you’re not in your 50s, check out our previous entries on tips for your 20s, 30s, 40s or your 60s.)

  1. Understand your spending. Most everyone knows (or can quickly calculate) how much they earn. Fewer people have a handle on what they’re spending. Knowing what it takes to maintain your lifestyle informs the rest of your financial plan. We’ve found that how a client spends is one of the most important factors in determining whether they will succeed or fail in reaching their retirement objectives. As a first step, take a look at our Budget Worksheet to figure out your monthly cash flow.
  2. Continue investing for the long haul. It’s tempting to think about making your portfolio more conservative as your 60s start coming into view, but keep in mind that you will likely need your nest egg to last another 20 to 30 years or more. While everyone’s risk comfort zone is different—and there’s never any need to take wild risks—growing your portfolio faster than inflation should still be your primary goal. Historically, that’s required an investment in stocks.
  3. Play catch-up. Turning 50 means you’re eligible to make catch-up contributions to your retirement accounts. If you turn 50 this calendar year, you can contribute up to $26,000 to your 401(k)—the $19,500 standard limit plus a catch-up contribution of up to $6,500—for 2021. Additionally, you can make catch-up contributions of $1,000 each to your health savings accounts (HSAs) and individual retirement accounts (IRAs). (And remember, you have until April 15, 2021 to make those HSA and IRA contributions for 2020—the IRS has yet to issue guidance on whether this deadline will be extended to May 17 along with the federal tax filing due date.)
  4. Consider long-term care. It isn’t pleasant to think about, but the reality is that half of people turning 65 today will require long-term care. If you’d feel better having long-term care insurance, the best time to purchase a policy is typically in one’s late 50s, before premiums begin shooting higher.
  5. What’s your retirement vision? Now’s a good time to start reflecting on what retirement means to you. Do you want to move somewhere warmer? Make time for volunteer work? Wear out your hammock or keep your hand in your profession through consulting? Don’t forget to include your spouse, partner or other loved ones in your planning.

These five tips apply to most anyone in their 50s. But it’s also important to recognize that your situation is unique. A financial plan that reflects your priorities is priceless—which is why we offer precisely that to our clients at no extra cost. If you would like our help to make sure you or a loved one have checked the right boxes on a financial plan, please contact your wealth management team. We’re here to help.


This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.

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