Throughout your life, situations will change. Priorities will fluctuate and you adjust your plans. While your 30s and 40s were focused on building wealth and saving for your future, your 50s are a time to evaluate your savings and investments and plan for your impending retirement. To gauge your financial situation in your 50s, here are five goals to consider.

Revisit your estate plan

Having an estate plan is important to protect your assets and your personal property. An estate plan is a collection of documents that explains how you want your assets to be passed down and who will protect your wishes in your absence. An estate plan typically includes a will, a power of attorney, a medical power of attorney, a living will, and a trust. Your 50s is a great time to review your estate plan and make any necessary changes. 

Retirement income planning

While you hopefully have been saving for your retirement for several decades, your 50s is a time to sit down and analyze how much you’ve saved. Look at your expenses and determine how much income you will generate in retirement. If there’s a projected deficit, it’s time to restructure your retirement plan. This means cutting expenses, or increasing your savings. Review your investment allocation and determine if there are any additional retirement income sources such as a deferred income annuity.

Live on less than you earn

You don’t want to reach retirement living beyond your means. By the time you reach your 50s, you should be able to know if you can live on less than you earn. It’s a good rule of thumb to live on at least 15% less than your income. This gives you a nice cushion for unexpected expenses that could pop up. 

Diversify and rebalance your portfolio

No matter your age, it’s important to diversify and rebalance your portfolio as your goals, risk tolerance, and time horizon change. Additionally, because the market is always changing, rebalancing your portfolio allows you to maximize your returns while minimizing your risk. In your 50s, it’s important to pay attention to how the market is performing. You can keep investing aggressively, but begin to shift toward an asset allocation of 60/40 split of equities to bonds. As you move into your late 50s and early 60s, you’ll want a higher percentage of short-term bonds instead of stock, as you will have less time to recover from big dips in the market.

Long-term care planning

While no one really wants to think long-term care is part of their future, it’s important to plan for the possibility that at some point in your life, you will need extra care. Long-term care insurance and funding strategies are best purchased and reviewed in your 50s. Once you reach your 60s, qualifying for long-term care coverage can be harder. Research your options and decide what makes sense for you.

If you’re at the stage in your life where you need to evaluate your investments and how well you are tracking toward your retirement goals, we can help you evaluate your options. Get in touch with us to learn how we can partner with you to help you reach your financial goals.