The older members of Generation X are turning 50 this year. If you are one of them, along with celebrating your half-century status, there are a few financial decisions to make after turning 50 that can set you up for a successful financial future and retirement.
Consider these money moves to make if you are hitting the big 5-0 in 2018.
- Maximizing your employer match. Making the most of your employer-sponsored retirement benefits is one of the easiest and most effective ways to supplement your retirement savings. If your employer’s maximum matching contribution to your 401(k) is 5 percent, then you should contribute 5 percent to enjoy the full benefit of that match. This is essentially free money that you would be missing out on otherwise.
- Taking advantage of catch-up contributions. When you turn 50, you become eligible for catch-up contributions to your traditional 401(k) and IRA. People 50 and older can make an additional $1,000 catch-up contribution to their IRAs annually (for a total of $6,500) or an additional $6,000 to their 401(k)s annually (for a total of $24,000).
- Researching long-term care insurance. Many people qualify for long-term care insurance starting at age 50, and especially if you anticipate poor health for you and/or your spouse, it can be a good idea to go ahead and secure it. Long-term care insurance will get more expensive the later in life you purchase it, so looking into your options after turning 50 could save you money in the long run—not to mention the lessened financial burden that will be inflicted upon your family and caretakers.
- Planning to move where the cost of living is lower. Age 50 is a good time to start thinking about where you want to retire. Retiring in a place where the cost of living is lower can save you significant amounts of money and allow your dollar to stretch further in retirement. If moving cities is not an option, then think about downsizing your home as a way to save money during your retirement years.
- Cushioning your cash reserves. Building your cash reserves while you still have steady income is an obvious way to make sure you are covered in the event of an emergency, job loss or other limiting financial factor. Experts suggest maintaining a two-year cash reserve by the time you turn 50.
Age 50 is a landmark year in one’s lifetime. Rather than dwelling on the fact that you are a year older, embrace these financial decisions to make after turning 50 as opportunities to prepare for a sound and exciting future.
If you are looking to secure your income in retirement, the Ty J. Young Inc. team can help! Call us today at 877-912-1919 to learn more.