The Key tips to Retiring in Your 50s | From a CERTIFIED FINANCIAL PLANNER™ Practitioner

The Key tips to Retiring in Your 50s | From a CERTIFIED FINANCIAL PLANNER™ Practitioner

May 04, 2023

Retirement is something that all of us hope to enjoy at some point in our lives. It's a time to relax, reflect and spend time with family and friends. However, for many of us, the idea of retirement can seem like a distant dream. With rising living costs and unpredictable economic situations, it can be challenging to save for the future. But don't worry; it's never too late to start planning your retirement. With careful preparation, you can retire in your 50s and live the dream. In this blog post, we will discuss key tips to retiring and strategies to help you achieve your retirement goals.

Step 1) Reverse Engineer the Process

The first step to retiring in your 50s is to first reverse engineer the process. How much will you need in retirement? Remember, you need an income plan that will not only be sustainable for 40+ years, but you need one that will keep up with inflation. Your plan should include your retirement goals, financial situation, and lifestyle needs. You should also consider the potential risks such as market volatility. You can utilize various savings tools such as 401(k)s, IRAs, and other investment options. Be disciplined and consistent with your savings, and track your progress frequently. A general rule of thumb would be that you can probably safely withdraw 4% of your portfolio without losing purchasing power. That means if your portfolio is built to realize a 7% average annual return, 4% of that can be withdrawn, and 3% reinvested for inflation. 

Step 2) Invest wisely

One of the essential elements of retirement planning is investing your money wisely. Investing is a long-term strategy that can help you achieve your financial goals and build a comfortable retirement nest egg. Consider investing in a diversified portfolio that includes stocks, real estate and perhaps alternative investments. Be mindful of the risks and potential losses, and make informed decisions.

Step 3) Learn to live differently than your friends

Saying no to the pleasures of today means your retirement dreams will come sooner. This might mean that while your friends and family take dream vacations, go to Disney, eat out regularly, etc., you say no to those things. While this is not fun, remember that by saying no now, you are able to save that money and retire sooner. Your fun will come but, for now, it might mean you live a bit differently than those around you. 

Step 4) Plan for healthcare expenses

Healthcare costs can be a significant expense during retirement. It's crucial to plan for these expenses and ensure that you have adequate health insurance coverage. Consider purchasing long-term care insurance and other supplemental policies. It's also a good idea to maintain a healthy lifestyle and prioritize preventative care.

Step 5) Be flexible and adaptable

Retirement planning can be a long-term process, and it's essential to be flexible and adaptable. Unexpected events such as market downturns, health issues, or changes in lifestyle can derail your retirement plans. Be prepared to adjust your plan accordingly and make necessary changes. Consider working part-time during retirement, or explore alternative sources of income. Stay connected with your community and friends, and pursue hobbies and interests that bring you joy.

The key to retiring in your 50s can be a challenging but achievable goal. Remember, it's never too late to start planning for your future, and every effort you make today can pay dividends in the long run. So, begin your retirement journey today and live the dream in your golden years!