When you’re in your 50s, the clock is ticking on saving for retirement.

While you can start collecting Social Security benefits as early as age 62, there’s a good chance most people don’t actually retire at that age. Regardless of the age at which you plan on retiring, your 50s are absolutely a time to start figuring it out.

Here are five next steps for people in their 50s to help them plan for retirement.

Set Goals

Having goals is crucial in planning for the future, but planning for retirement when you’re in your 50s requires realistic goals. Gone are the days of fantasizing about retiring on a sailboat and sailing around the globe in carefree bliss – unless you’ve carefully planned for that for years already.

In your 50s, it’s past time for you to start considering what type of retirement you want to have and if you can make that happen in the time you have left as a wage earner. A financial advisor will be of great assistance here. They can run the numbers and let you know what type of retirement you’re looking at now based on your savings thus far, along with other factors like existing debt and anticipated medical expenses.

Maximize Savings with Increased Contribution Limits

A benefit of being in your 50s is that you can exceed the typical contribution limits for your 401(k) and IRA.

You can make catch-up contributions towards your 401(k) of up to $7500 and $1000 for traditional or Roth IRAs. That’s above and beyond the IRS’ annual contribution limits of $23,000 (2024) for a 401(k) and $7000 (2024) for an IRA.

Why should you take advantage of the increased contribution limits in your 50s? It’s a great opportunity to potentially decrease your taxable income while also further padding your retirement savings.

Retirement is looming – take advantage of the time you have in your 50s to save for it.

Tackle Remaining Debts

Going into retirement with piles of debt is a mistake that should be avoided. By obtaining debt in your 50s – or not paying off your debt – you’re taking money away from your future, retired self.

Make a concerted effort to pay down your debts in your 50s, making this task a financial priority alongside saving for retirement.

Admittedly, it can be difficult to not indulge in big expenses while you’re in the prime earning years of your 50s and likely making more money than ever. However, debt in your 50s, quickly becomes a costly burden in your retirement years.

Don’t just pay off your debt – don’t incur additional debt, either. Simply put, your retirement money will go further if it’s not needed to pay off debt.

Instead, make your money work for you by investing the same amount you previously paid your creditors in your own future.

Don’t Give Up on the Stocks in Your Portfolio

Many people in their 50s develop a more risk-adverse line of thinking and, consequently, feel the urge to sell the stocks in their portfolio and instead focus on investments like bonds. But it’s important to remember that stocks can have growth potential, so dumping your stocks out of your portfolio in your 50s might be a mistake.

In your 50s, it’s important to carefully consider the best direction for your portfolio – your financial advisor can help.

Collaborate with Your Financial Advisor

You don’t have to do it alone. The right financial advisor can run projections of your retirement based on your current situation and can help you see the bigger picture of changes you can make in your 50s to better prepare you for the retirement you want.

Ideally, you and your financial advisor become a powerful team that can not only help you prepare for retirement, but also help you navigate your retirement once you get there.

Schedule a conversation to find out what changes you can make in your 50s to prepare you for your retirement.

https://www.waterstonewealth.com/retirement-planning-quiz/

The opinions contained in this material are those of the author, and not a recommendation or solicitation to buy or sell investment products. This information is from sources believed to be reliable, but Cetera Advisor Networks LLC cannot guarantee or represent that it is accurate or complete.