What should your retirement savings be by age 50?




By the age of 50, many Americans are well-established at work, but many Americans are still taking care of some of the economy, such as taking care of their children while taking care of their aging parents and themselves. It is also the age when you can balance your personal responsibilities.

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Making sure your retirement plans are on track can take a back seat to your priorities. Meanwhile, financial experts caution that, while there are no hard and fast rules, retirement is not far away and there are steps that can be taken to plan for a comfortable retirement.

“Retirement isn’t for everyone. There’s a reason we say personal finance is personal,” says founder of Financial Wellness Strategies and Launching Financial Grownups: Live. Bobby Rebel, author of Your Richest Life by Helping Your (Almost) Adult Kids Be Everyday Money Smart.

“That said, it may make sense to consult a financial advisor and do the math. You can figure out how much money you need to invest in. Be sure to factor in inflation and a realistic return on investment.”

Check your position on the timeline

Ideally, by the time you’re 50, you’re on track to reach your retirement savings goals. Even if not, that age is the perfect time to sound the alarm, Rebel said, because many of us still have decades to contribute and grow our investments.

not enough? Align your savings and investments rationally and realistically. Not enough yet? Get used to course correction, she said.

“We are often bombarded with ambitious images of what our retirement should look like by companies that have a stake in working with us,” she says. “It can be a great motivation.

“The bottom line: Evaluate your investments against your own realistic goals and aspirations, not your friends and family. Also, avoid investing in light of

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Start with a few questions and ratings

The age of 50 is 17 years away from ‘formal’ retirement, and some professionals may work beyond that, some say this is a sure runway that will have some impact on retirement. says the house.

“It starts with setting goals and evaluating what you can do,” says Tatiana Tsowar, CPA, business expert, and founder of The Bold Blog. “Ask yourself these questions.”

First, when do you plan to retire? “I know a lot of people are already confident in their careers and know what’s going to happen overall, just by looking at what they’ve done in their 40s and 50s,” she said. To tell. “So if 67 is any age, the next question is: What is life expectancy at age 67? Of course, this number is also arbitrary, but it gives you a good idea of ​​what your goals are. .”

The next question is, “How much money do you need per year, after taxes, to comfortably retire?”

“This will require a bit of math depending on whether the house is paid off, whether you have debt, whether you have full Medicare or supplemental insurance,” Tsowar said.

Save 6 times your income by age 50

Rita Asaf, vice president of retirement products at Fidelity Investments, said Fidelity aims to save at least 15% of its pre-tax earnings each year, including matching with employers, with a goal of 10x pre-retirement earnings. He explained that he is proposing to aim for she is 67 years old.

“Achieving that goal generally means aiming to save six times your income by age 50,” Assaf said. “Keep in mind that there are other factors that can affect that milestone, such as when you plan to retire and what kind of lifestyle you want to lead after retirement.”

One of the best things you can do in your 50s is make the most of your catch-up giving, she added.

Reduce financial risk as retirement approaches

Another important step towards age 50 is making sure your asset allocation matches your risk tolerance and is appropriate for your age group and time period.

Investing in target date funds or managed accounts, for example, can provide greater peace of mind during times of high volatility, Asaf said.

Diversify as exposure to different segments of the market, including US small and large caps, international equities and investment grade bonds, allows you to balance risk across your portfolio according to age and goals don’t forget , she added.

Finally, don’t be afraid to rebalance your portfolio. “Avoid portfolio drift that can occur during bull markets when stock prices rise and asset allocations become imbalanced,” Asaf said.

As always, talking to your financial advisor to review your goals, plan your scenarios, and hopefully gain some peace of mind can help, she added.

get out of debt and plan for medical expenses

According to Dr. Jay Zigmont, a certified financial planner and founder of ChildFree Wealth, most people have two goals to aim for by the time they turn 50. One, pay off all non-mortgage debt, and his second, make plans for long-term care.

“Being debt-free provides a platform from which you can put all your extra income into savings and investments,” says Zigmont. “Although long-term care is often overlooked, your 40s can also be the cheapest time to get long-term care insurance.

Andrew Latham, Certified Financial Planner and SuperMoney.com Content Director, echoed the sentiment, noting that medical expenses can be a significant financial burden in retirement.

“As you approach the age of 50, start considering your health care needs and consider options such as long-term care insurance and a health savings account (HSA) to cover potential health care costs,” Latham said. increase. “Including health care costs in your retirement savings plan is very important to staying financially secure later in life.”

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This article originally appeared on GOBankingRates.com: Expert: What Your Retirement Savings Should Look Like By Age 50

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