You’ve hit 50 and things seem to be tracking along OK. Best to find out for sure.
Your 50s are an exciting phase of your life financially because it’s about this time that your expenses should start to decrease as your children become more independent, you are at or near the peak of your earning power, and best of all you still have time up your sleeve to ramp up your retirement savings.
But it’s also a very busy time and you may not have been attending to your financial plan with complete diligence. Time to do a thorough audit of your finances, preferably with a financial planner or your accountant.
Do some projections
This exercise should include projections about how much money you will need in retirement to fund the lifestyle you want.
Beef up your super
You’ve been paying into super for about 20 years by now and there should be a decent amount in your account, but a smart strategy at this point in your life is to pour in as much money as you can.
Despite what seems to be constant tweaking of the rules surrounding super by the Government, it is still a great vehicle for building wealth because of its generous tax provisions.
Once you hit 55 you could be eligible under the “transition to retirement” incentives to start a pension through your super fund while still working, enabling you to salary-sacrifice significant amounts into your account.
Review your debts
Review your debt. Pay off credit cards and other non-tax deductable debt as a priority. Keep your emergency buffer supply of cash intact.
Encourage your kids into the workforce
Your children are most likely of an age now where they can get a part-time job.
Encourage them to do so. It is time they started funding their own lives. If they are finished school, talk to them about moving out of home. The modern trend of children staying at home until they are in their mid-20s is a good strategy for them to save money but can seriously dent your own financial goals.
Downsize if it makes sense
If you have achieved empty-nest status, consider downsizing. Selling your family house, buying a smaller place and investing any money left over could really boost your bank balance. It will also reduce your living expenses.
Now that the responsibilities of parenting are waning, it’s time to think about how you are going to enjoy your next stage of life. What does “retirement” look like for you?
Will you be quitting formal work altogether or do you plan to work part-time?
Invest in your health
And again, continue investing in your physical fitness. There’s no point reaching the stage of life where you have the money and the time to pursue your dreams if you can’t take advantage of it because of poor health.
Time to do a thorough audit of your finances, preferably with a financial planner or your accountant.