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Planning in your 50s

Maximize your retirement savings.

If you haven’t started your retirement planning yet, then now’s the time to start. The good news is that you probably have 10-15 peak earning years left to reach your goals. Additionally, many of your larger expenses—like your mortgage—may soon be behind you, so one strategy would be to use those funds to save for retirement. Keep in mind that you’re entering a phase where market volatility can be more of a concern because you will have less time to recover from a dip.

And remember, if you’re in your peak earning years, you should maximize your 401(k) by making sure you are contributing enough to take advantage of your employer’s full match.

You’ll also want to put each of the following on a checklist:

  • Look out for Number One: No more distractions. Your retirement plan should be your first priority now.
  • Be calculated: Estimate living expenses and determine what your accounts will be worth when you retire. You can use the calculators available on the Internet to determine these figures, or you can contact your financial professional to give you a more accurate number.
  • Consolidate: If you have worked for several employers over the years and have accumulated a number of smaller plans, consider consolidating them: this will give you a clearer picture of your plan’s overall performance. It can also make managing your portfolio simpler and easier. Note, however, that your asset choices may be somewhat limited if you choose this option.
  • Make it an obsession: It’s important to pay close and frequent attention to your retirement plans. Be sure to review them yearly. At this stage, your portfolio and estate planning goals need close attention.
  • Do a balancing act: Assess the risks and rewards of your retirement portfolio. Keep an eye on asset allocation and make sure you are looking at the percentage allocated to each type of asset at least once a year. Redirect future contributions or rebalance your portfolio between asset classes as necessary.
  • Play catch-up: Part of the Restoring Earnings to Lift Individuals and Empower Families (RELIEF) Act of 2001 allows you to aggressively build your retirement account now, and in some cases catch up for lost time. Keep in mind, though, that the IRS has specific catch-up limits that apply to individuals 50 and older. Ask your financial professional to help you do all you can to maximize your nest egg now.

50s guidance from the professionals at New York Life:

Tema Steele, New York Life Agent, South Jersey General Office: “Don’t be one of those people who had term insurance and is forced to drop it when the premiums go up. Try to convert term into permanent insurance while you can. One goal should be to have coverage in place.”

Rakesh Bansal, New York Life Agent, Princeton General Office: “If you’re in your 50s you should try to have permanent life insurance. If you missed out on buying it before, don’t worry because you can still achieve permanent protection for your family and gain access to guaranteed* cash value accumulation over time through policy loans which accrue interest and reduce the death benefit and cash value. Also, it help you to spend down other assets on a comfortable basis without worrying about preserving assets for your children.”

Richard Miller, New York Life Managing Director, Retirement Income Security: “If you’re in your peak earning years you will want to keep more of what you earn. Consider retirement plans that provide tax-advantageous, stable retirement income.

Dylan Huang, Corporate VP, Guaranteed* Income Annuities**: “There are many common myths about annuities: one is that if you give a large sum of money to the insurance company and you don’t live as long as you expect the insurance company keeps the money; another myth is that an annuity only gives you access to a set amount of money each month. Both are untrue.

The reality is that many income annuities come with optional features and payment methods that give policyowners direct control over where their money goes and for how long.”

* All guarantees are based upon the claims-paying ability of the issuing company.

** Issued by New York Life Insurance and Annuity Corporation (NYLIAC) (A Delaware Corporation), a wholly owned subsidiary of New York Life Insurance Company.

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