Financial Milestones in Your 50s

Many of us women hit a perspective-altering mental milestone as we move into our 50s. We've spent the last decades busy with the art of creation—whether that revolved around family, a home, a career, or any combination of the above. But now, our perspectives begin to shift. This transition was highlighted to me the other day when I received an anxious call from a childhood girlfriend.

“I've just realized, everyone I know has their whole retirement planned out, and I don't have a clue!”, she exclaimed in exasperation. Attempting a soothing tone, I told her not to panic. Sure, the longer you have to strategize and save, the better. But in our 50s, there is still plenty of space for preparing for retirement. We just need to get a shimmy on so that we can enjoy the fruits of our labor sooner rather than later!

“What do you mean?”, my friend asked. Well, I explained, waking up to the need to lay our later-life foundations is a milestone that many of us tune into around now. But there are other financial milestones in your 50s that are worth jotting down and checking off the list. Some are as simple as building a clear picture of what's to come, while others mean making necessary changes to habits.

Not having these bases already covered in your 50s is often a sign of a life well-lived. But, having crossed the mid-century threshold, the perfect moment has arrived to address any oversights. With that in mind—for all of our benefit—let's explore the things to have on the agenda this decade so that we can get right on track when it comes to preparing for retirement.

Know Your Retirement Age

Getting a clear sense of when you're going to retire will inform how long you have to put money aside, not to mention how long you might need to self-fund afterward. A handy indicator can be found in your full retirement age (FRA), which is the age you need to get to before claiming your standard Social Security benefit or your primary insurance amount (PIA), which is an inflation-adjusted reflection of your career earnings.

You can check how much of a trove you've accumulated with Social Security for an estimate of what you can expect, keeping in mind that if you claim earlier—starting from age 62—you'll get less each month, but if you wait until you hit 70, you'll enjoy a delayed credit.

Review Your Savings and Assets

Among financial milestones in your 50s, a biggie is identifying where is your money going to come from when you've retired. After Social Security, what other pots, pensions, or properties will be able to help keep you thriving? It helps to list out every possible retirement income source and then map out your monthly living and discretionary expenses in order to compare the two, while an online retirement calculator will help you factor in things like inflation. If this process feels daunting, take comfort in knowing that making a plan affords peace of mind and confidence, even if we still have some work to do!

Play Retirement Catch-Up

If running the numbers reveals that you're behind in preparing for retirement, there are a few opportunities for wiggle room. For example, the IRS allows us to make advantageous annual leaps forwards in retirement planning, such as throwing an extra $1,000 into a qualifying IRA, and up to $6,500 into a 401(k). If you're going to start putting more money aside, you might as well make sure you get as much bang for your buck as possible!

Reduce or Eliminate Your Debt

Carrying debt after retirement can be a real drag, as payments eat into what would otherwise fund your golden years. This makes the goal of paying down or eliminating debt a fantastic target. Of course, some types of debt are more problematic—and costly—than others, while certain kinds of debt such as home equity or a mortgage can actually provide a boost to your financial standing through tax advantages.

When we consider that the average Gen X individual (age 41 to 55) has a personal loan debt of $18,922 and a credit card debt of $7,070, it's easy to imagine how cleaning these slates could contribute positively to preparing for retirement.

Plan For the Possibility of Long-Term Care

While it's obviously not the part of retirement that any of us look forward to, 70% of us will need some kind of long-term care—and women tend to need that kind of assistance longer than men. A great way to face this unwelcome possibility head-on is to explore options and consider whether to put extra savings aside or take out a long-term care insurance policy. As a sweetener, in many cases, enrolling in this kind of insurance program in our 50s is rewarded with lower premiums.

Take Care of Your Will and Estate Planning

Having ripped off the unwelcome band-aid of addressing long-term care, let's spend just one more moment in the realm of the morbid and discuss will and estate planning. If you think about it, you've spent a lifetime building a legacy, so doesn't it make sense to steer what happens after you're gone? This is one of the most challenging financial milestones in your 50s, certainly, but perhaps one that offers the most peace of mind. Get to grips with your will, life insurance, what could be left in trust, who will have power of attorney should the need arise, and your advance healthcare directive.

Forge a Picture of Your Future

Now that you are looking past your big career goals or an emptied nest, what will the rest of your story look like? Considering that we women live longer than men, possibly the best of the financial milestones in your 50s comes with realizing that you have the freedom to steer what the decades ahead will look like, and enough time to manifest something that is just for yourself. Sound good? Then it's time to get started with planning for retirement on your terms!