Where You Should Be (Financially) In Your 50s

In my latest podcast episode, I discussed three key points for individuals in their fifties.

Firstly, prioritize retirement planning and address the sense of urgency, considering both financial and physical well-being.

Secondly, manage finances wisely by paying off debts, maximizing work pensions, and utilizing critical illness benefits and group life insurance.

Lastly, seek guidance from a certified financial planner to create a solid financial plan, make informed decisions, and gain confidence.

By focusing on these points, you can navigate your fifties with clarity and prepare for a secure future. Discover essential tips for financial success in your fifties here.

Show Notes:

Hey there, welcome back. Today, I’m going to share a few milestones and checkbox items that should be on your radar in your fifties. This might be a time in your life where you feel like things are whizzing by and there’s a sense of urgency. Many emotions come into play during this time. Now, I’m coming up there, so I am kind of in your shoes right now.

The most common thing I hear from clients is that time is flying by, and they realize they have some work to do. The realization that you don’t want to work forever is creeping up, sparking a sense of urgency. So, let me guess. You’re already dreaming of a retired life and now you want to get there as fast as possible.

On the other hand, I’ve seen cases where there’s no hurry to retire, but individuals want the confidence of knowing they are financially wise and making the right decisions. This time is about maintaining good health, eating right, starting a weight training regimen for bone health and mobility, and becoming financially fit in your fifties, as well as physically fit.

Additionally, there might be a sense of FOMO (Fear of Missing Out). FOMO is an acronym for the fear of missing out, and I know that it can be prevalent during this stage. Some of you may be witnessing your coworkers retiring and desiring that same freedom, which contributes to a sense of FOMO in your fifties. You may find yourself at a crossroads, having experienced significant life events such as marriage and children growing up. They might even be starting to leave the nest, and you might be at the pinnacle of your salary or career. It’s a time to get things in place and start pre-retirement planning.

Today, I’m going to share a few quick tips for you. You can check them off and then set them aside while continuing to live your life. However, these are important things that you need to ensure you have in place.

The first tip is if you have any debt, especially a mortgage, make sure you have a plan to pay it off. You should also consider any lines of credit or car payments and have a strategy in place to manage them. This could be a good time to start reducing expenses, particularly if your children have left home and your financial responsibilities have decreased.

Another tip is to make sure you are taking full advantage of your work pensions and maximizing your contributions. It’s essential to also maximize your employer health benefits, including programs like stock options, retirement savings, and group savings plans. Don’t overlook the importance of maximizing your group critical illness benefits, as it can provide a significant lump sum payout in case of a critical illness.

Additionally, consider getting group life insurance through your employer while you’re working. It is often more affordable compared to purchasing individual life insurance, and the likelihood of claims tends to increase as you enter your fifties and sixties.

Another crucial aspect is building up your emergency savings fund. It’s important to have a cash reserve readily available for unexpected expenses. As you get older, your definition of the “sweet spot” for emergency savings may change, so ensure you are saving an appropriate amount to cover unforeseen costs and avoid relying on debt.

Use your tax-free savings account (TFSA) for longer-term planning and savings rather than treating it as a regular bank account. The growth in a TFSA is tax-free, and it can be an effective tool for your retirement savings. Consider your risk tolerance and investment allocation when utilizing this account.

Involve your spouse in the planning process and include them in financial discussions. When both partners are on the same path and have a shared vision of the future, savings can be supercharged. This not only strengthens your relationship but also enhances communication and teamwork.

Review your wills and power of attorney documents to ensure they are up to date. Make any necessary changes and inform the relevant people about your wishes and chosen executors. This step is crucial for proper estate planning.

Finally, consider seeking guidance from a certified financial planner (CFP). Having a financial plan and strategy in place can provide you with confidence and help you make informed decisions along the way. A CFP can assist you with budgeting, investment choices, tax planning, and other aspects of your financial life.

For most people, their fifties are a time to make the final push for retirement by saving as much as possible and paying off any debts. It’s also a crucial period to handle important financial planning decisions, such as retirement planning and estate planning. If you need a little nudge, visit my website at financial.ca and download my free retirement workbook. It will help you organize and provide a starting point for your planning journey.

Take care and talk soon.