When you hit your 50s and 60s, retirement is no longer on the far horizon. Now it’s looming large, and you’re likely feeling the pressure to get your financial ducks in a row. Consider these tips to make the transition easier—and to lay the groundwork for a more comfortable retirement.
1. Boost Your Retirement Savings
The years before you retire is a prime opportunity to maximize your savings (and play catch-up if you’ve fallen behind). If you can, take advantage of the increased annual contribution limits sometimes “catch-up provisions” available on some accounts including Traditional & Roth IRAs, Health Savings Accounts and 401k accounts.
2. Consolidate Your Accounts
If you have multiple retirement or investment accounts across multiple institutions, it you might find it easier to manage your assets if everything is in one place. Doing so will make it easier to see what you have, manage your total portfolio risk and can potentially reduce your fees. However, figuring out which accounts you can consolidate and how to consolidate them can be complicated so you should consult with a financial advisor.
3. Manage Your Debt
Many people want to retire debt free, and if that is a goal for you now is the time to pay off existing auto loans or credit card debt, and think twice about taking on new debt. Depending on your situation, it might also make sense to pay off your mortgage—though not at the expense of your retirement savings. If going debt-free isn’t realistic right now, refinancing might be an option. You might be able to take advantage of more favorable terms or better interest rates.
4. Cut Your Expenses
Do you have expenses-of-habit that you don’t really need? Do you need that cable package with 800 channels? Or, maybe you no longer need the same level of internet service you did when you had teenagers streaming on multiple devices. Or, maybe you want to consider a bigger move like downsizing. If your 4 bedroom, 3 bath house is getting too hard to maintain now that you’re empty nesters maybe a rambler, townhouse or condo makes more sense—for your lifestyle and your finances.
5. Rethink Your Investment Strategy
Now isn’t the time to pursue high-risk investments. Work with your financial adviser to ensure the proper asset allocation for your situation. Most people need to plan for a twenty or thirty year retirement which means keeping enough growth in your portfolio to keep up with inflation without taking on more risk than you are comfortable with.
6. Make a Plan for Long-term Care
Nearly 70 percent of Americans age 65 and older will need some form of long term care, according to government statistics. And the average duration of care is a full three years. Whether your plan is to purchase long term care insurance, self-fund long term care or rely on family you should get those things in place now.
By thinking through these options now rather than waiting until retirement, you’re already ahead of the game. Just don’t do anything drastic without first consulting a trusted financial advisor.
This article originally appeared in Pioneer Press on June 1, 2019. You may view the article here.
By Bruce Helmer and Peg Webb, Financial Advisors at Wealth Enhancement Group and co-hosts of “Your Money” on KLKS 100.1 FM on Sunday mornings. Email Bruce and Peg at email@example.com. Securities offered through LPL Financial, member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.
Peg Chromy Webb has specialized in financial consulting for more than 30 years and is a popular co-host of the “Your Money” Radio Show. She is passionate about financial education and shares her expertise on career-building and financial literacy through various charitable endeavors.