If you’re reaching the big 5-0 this year (or it’s soon coming down the line), this significant milestone is certainly worth celebrating. And for many, it marks another important event—the moment people realize retirement is closer than ever, meaning it’s time to buckle down.
With retirement on the horizon, this is your opportunity to shore up your savings, investments, and future income strategies. The choices made today and in the coming years have the power to shape the kind of retirement you’ll experience.
The good news? You still have time to make meaningful progress. If you’re in or nearing your 50s, you may be entering a critical window of opportunity to secure your financial future. Let’s explore why this time is so important and what you can do about it.
What Happens When You Turn 50?
Reaching age 50 brings a unique set of opportunities that make it an ideal time to supercharge your retirement planning and saving.
For one, most people reach their peak earning years between their 40s and mid 50s, according to the U.S. Burea of Labor Statistics.1 At the same time as your salary may be reaching a pivotal high, you may find that your household expenses are dwindling—kids have flown the nest, the mortgage is (or almost) paid off, and your disposable income is higher than usual.
After age 50, the IRS also allows individuals to make additional catch-up contributions to their retirement accounts, including 401(k)s, IRAs, and Roth accounts. Catch-up contributions are vital to shortening any savings gaps you may currently have, as they can equate to tens of thousands in extra tax-advantaged savings over the coming decades.
But perhaps the most significant shift in those age 50 and older is the realization that retirement is no longer a distant concept—rather, it’s fast approaching. Having a sense of urgency can make it easier to commit to your retirement plan, as long as you’re able to channel any feelings of concern into action.
If this sounds like your situation, know that you’re not alone—and it’s not too late to act.
The Reality of Being Behind
By 50, most people start to realize they’re probably behind on retirement savings. Maybe life got in the way, which created other more immediate financial priorities—raising kids, paying off a mortgage, or dealing with unexpected expenses.
At this stage, you have some time to catch up, and the sooner you start, the better your chances of success will be. It’s not too late to build the retirement you want, but you need a focused plan.
If you haven’t already, assess current financial standings. Determine where your income will likely come from in retirement, including Social Security payments, pension or annuity (if applicable), investment income (from rental properties or other busines ventures), savings, and dividends or interest earned.
Then, calculate your estimated financial needs—figure out what it’ll take to maintain your lifestyle in retirement. You may be able to find an online calculator, but working directly with an advisor can help you build a more accurate and tailored retirement plan. They can help you focus your financial resources on accumulating retirement income and making the most of your final years of saving.
The small changes you make now can create a significant impact in the long run, especially if you focus on equity investments for growth.
Now’s the Time to Act
We won’t sugar coat it: Retirement is no longer a distant dream, it’s fast approaching and will be here before you know it. The sooner you take thoughtful, strategic action, the better prepared you’ll be for the retirement you envision. Create a structured plan that includes specific, measurable goals, and focus on accumulating the necessary wealth for supporting your lifestyle in retirement.
Now’s not the time to dwell on time lost or steps not taken—let’s use these next few years to make major progress toward securing the stable, long-lasting retirement you deserve.
Maximizing Your Time Before Retirement
These next few years leading up to retirement can be used to accelerate your savings and make meaningful progress towards your retirement goals. Working with an advisor, you may want to determine which tax-efficient investment strategies can help mitigate unnecessary tax bills while building your future retirement income.
Continue contributing to your retirement savings accounts (max out the annual contributions plus catch-up contributions if possible) in order to benefit from compound growth.
Welcome to the Sweet Spot for Retirement Planning
We like to think of 50 as the “sweet spot” for retirement planning. Why? Because it’s the time in a person’s life when they’re most primed for change and open to expert guidance. Right now, you can still make significant progress toward your retirement goals, especially if you forge ahead with a focused strategy (and having a trusted partner to lean on certainly helps as well).
Ready to make the most of this crucial stage in your retirement planning? Reach out to us today to get started.
Sources
1https://www.bls.gov/charts/usual-weekly-earnings/usual-weekly-earnings-current-quarter-by-age.htm
