Many financial planning articles are geared towards people starting out or those nearing retirement. But what about people in their 50s? The Street’s recent article entitled “5 Things to Do in Your 50s,” says that they need help, too. Here are five simple action items for 50-somethings to make sure their estate and financial plans are on track:
Maximize your retirement plan. When you turn 50, the IRS lets you contribute more to your retirement accounts each year. Known as “catch-up contributions,” if you have the cash flow, take advantage of this.
Fund a Health Savings Account (HSA). If you’re eligible for an HSA, contribute to it! Even a small amount each year will make a difference.
Long-term care. Think about buying insurance to mitigate the risk of paying out of pocket for medical expenses. Age 55-60 is a good time for purchasing a policy, as they tend to be less expensive than purchasing one in your late 60s.
Review your estate planning documents. Your circumstances, financial condition and federal and state laws can change. Make certain that you review your estate plan every few years and keep it up-to-date. At a minimum, you should have a will, power of attorney, and advance medical directive. Many people also benefit from having a revocable trust.
Toss junk and focus on experiences. While not really finance-related, it’s important to speak with your children and friends and see if they want to rummage through boxes of old pictures, silverware and sweaters years from now. Probably not. They most likely would want you to keep what’s most valuable and toss the rest. Rather than spending money on keepsake items, perhaps spend it on trips with the family or meaningful experiences that your loved ones will cherish for a lifetime. You might also donate to a charity that enriches you and makes you feel fulfilled.
Work with an experienced estate planning attorney and financial planner and update (or start!) your plans, now that you’re in your 50s.
Reference: The Street (Nov. 24, 2021) “5 Things to Do in Your 50s”