How to Begin Preparing for a Golden Retirement in Your 40s and 50s

October 5, 2023

Retirement is a milestone that many of us eagerly anticipate as the time to kick back and savor the fruits of our labor. If you’re in your 40s or 50s, this is a great moment to connect with your retirement vision, evaluate your financial progress, and refresh your habits for a fulfilling retirement. 

In this blog, we’ll explore financial strategies and lifestyle tips for retirement to help you set the stage for a retirement you’ll cherish.

Explore Your Retirement Vision

While you may not be certain about what your retirement will bring, exploring the possibilities can help motivate your preparation and act as a reality check on your progress.  

To develop a preliminary retirement vision, ask yourself questions like: 

1. When do I want to retire?

2. Where might I live during retirement?

3. What might a healthy lifestyle look like for me as a retiree?

4. How might I spend my time?

These simple questions can reveal a lot about what is most important to you. Even if the specifics of your plan might change, you will have a foundation that you can build on. Remember, plans may mean nothing, but planning is everything! 

For more retirement inspiration, check out this 5-part series on shaping your retirement vision and bringing it to life.

Refresh Your Retirement Finances

Let’s get down to brass tacks. How do your finances support your life vision? Ask yourself this question anytime you’re evaluating your financial goals – especially your retirement plan. 

Here are the most important elements of retirement planning:

1. Make a retirement budget that reflects your vision

Begin by outlining your expected expenses during retirement. As a person in your 40s to 50s, your expenses may be between 55-80% of your current income. Consider all aspects, including housing, healthcare, transportation, food, entertainment, and travel. Be as comprehensive as possible, while accepting that your expectations may change.

Next, calculate your expected sources of income during retirement. This may include Social Security benefits, pensions, rental income, investment income, and any other sources. Be realistic about the amount you can expect from each source.

Remember that this is an estimate that serves to guide you. Your guesstimate can transform into a more detailed plan with the help of a financial advisor as you near retirement.

2. Tackle your debt, maximize your retirement savings

Many people struggle with balancing debt repayment and saving for retirement. Paying off high-interest debts, such as credit card balances and personal loans, is a high priority because they’re expensive. Investing for retirement is fundamental because the longer your portfolio remains invested, the more your savings may grow thanks to compound returns

Creating a financial plan that attacks your debt and maximizes your retirement savings can be tricky because it depends on a number of factors, like your age and type of debt – but the effort is worth it. If you haven’t already, start researching your debt consolidation options, and connect with a financial advisor who can help get you on track.

3. Check in with your investment portfolio

Whether you’re a DIY investor or working with an advisor, it’s important to understand how your investments fit with your risk tolerance and financial objectives. Review your retirement savings, including 401(k)s, IRAs, and other retirement accounts. To get a sense of where your portfolio stands, you can ask your advisor, “How does my asset allocation align with my retirement goals?” 

4. Monitor and adjust

Make an annual date with yourself to check in on your retirement plan. If you have a financial advisor, she can help you honor this commitment. Remember, your retirement plan is not set in stone. Because life circumstances change, it’s important to revisit your plan. Periodically review your progress, adjust your budget, and reassess your investments. Staying adaptable and open to change will help you navigate change.

Value Your Health and Social Connections

Taking care of your physical and mental well-being is one of the best investments you can make for a fulfilling retirement.    

As you approach your retirement years, consider recommitting to the activities that enrich your health. This likely includes: 

·  Participating in physical activity

·  Maintaining a balanced diet

·  Caring for your emotional and mental health

·  Engaging in fulfilling hobbies

·  Connecting with others

If you’re at the peak of your career, consider which of these elements may have slid out of your regular routine. Have you fallen out of touch with family or friends? What role does physical activity play in your life? Have your favorite hobbies fallen by the wayside?

While you may not be able to make these changes overnight, reconnecting with the activities that you value most can steer you toward a fulfilling and resilient retirement. 

We’re Here For Your Next Chapter

As with any life change, retirement can inspire both excitement and anxiety. Whether you’re on the edge of retirement or you’ve already launched into this new chapter, we’re here to help ensure that your finances align with this exciting new phase of your life. 

Connect with Alicia and the SWM Team

Singer Wealth Management