Turning 50 marks an important milestone—not just personally, but financially. If you haven’t started planning or saving for retirement yet, now is the time to take action.
More than 55% of Americans say they expect to work during retirement due to inadequate preparation. While consulting a certified financial advisor is the best way to create a personalized retirement plan, here are five key steps to help you start planning in your 50s:
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Determine Your Ideal Retirement Age
Most people retire between ages 62 and 64, but your ideal retirement age will depend on your lifestyle goals and financial situation. Use a Social Security retirement calculator to see when you’re eligible to claim benefits and how that timing aligns with your retirement goals.
If you’re still employed, consider discussing a long-term exit strategy with your employer to ensure a smooth transition when the time comes.
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Know Your Retirement Number
How much will you need to retire comfortably? Recent surveys suggest many Americans believe $1.7 million is the magic number—up from the long-held $1 million estimate. But the truth is, there’s no one-size-fits-all figure.
Your “retirement number” should reflect your unique goals, lifestyle, and expected longevity. Since women typically live longer than men, they may need a larger nest egg. Work with a financial advisor or accountant to calculate an accurate, personalized retirement target—and avoid guessing.
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Create a Unified Budget
Building a comprehensive budget helps you understand your current financial standing—what’s coming in, what’s going out, and where you can cut back. This is especially important if you’re part of a couple preparing for retirement.
Many couples maintain separate finances and aren’t always aware of each other’s spending habits. Having a candid retirement conversation and creating a joint budget will help you align your spending, saving, and long-term goals.
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Plan Ahead for Healthcare Costs
Healthcare is one of the largest—and most overlooked—expenses in retirement. A healthy couple retiring at 65 can expect to spend at least $400,000 on medical care throughout retirement.
To prepare, consider opening a Health Savings Account (HSA) in your 50s. An HSA allows you to save money specifically for medical expenses, and as long as the funds are used for qualified medical costs, the withdrawals are tax-free.
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Eliminate Debt Before You Retire
Entering retirement debt-free can dramatically reduce financial stress. Make it a priority to pay off credit cards, car loans, and especially your mortgage, if possible, while you’re still working.
The more you can reduce your financial obligations now, the more freedom and flexibility you’ll enjoy in retirement.
Your 50s are a critical decade for retirement planning. Start by setting clear goals, understanding your finances, and seeking professional guidance. The sooner you take these steps, the more confidently you can approach your retirement years.
