Is 50 Too Old to Make Changes and Plans for Retiring?

 In Retirement


We all look forward to the time in our lives when we can quit working and focus on actually enjoying life. Retiring is a dream that helps us get through the rest of our lives. However, more and more people are discovering that they

However, more and more people are discovering that they might not be able to retire at all. If you’ve waited until the age of 50 to start planning for retirement, is there actually any point? Can you make the changes needed in time?

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Are You Actually Interested in Retiring?

While most of us long for retirement, a growing segment of the population actually wants nothing to do with it. This trend has emerged in both the US and the UK, and more people than ever before are deciding to stay in their job.

For many of them, the idea of not working is something they simply cannot handle. They actually want to work, and they’ll stay with their current job for as long as possible because of that.

Returning to the Workforce

The common consensus is that once you retire, you’re out of the workforce. You’re enjoying your time doing whatever it is you like, whether that’s golfing, shopping, reading, gardening or something else.

However, quite a few retirees have actually found that what they like best is actually work, and have come back out of retirement to pursue that. Some of them choose to rejoin the workforce with a new employer, while others opt to start their own business.

Can You Afford to Retire?

While some people never want to quit their job, and others return to the workforce after retiring, many people are finding that they simply cannot afford to retire.

Between shrinking wages, increasing debt and longer lifespans, not to mention the rising cost of health insurance, real estate costs and a myriad of other factors, it seems virtually impossible to plan on retiring at all, much less if you start planning at age 50.

However, with all that being said, it really is never too late to start planning, and even enjoying a significant chance of being successful. If you’re age 50 and haven’t saved a dime toward your retirement, there is still time, but you’ll need to act immediately.

According to Richard Colarossi, a CFP, “These could be your max earning years. Set your retirement goals, maximize your savings, pay debt and help your kids pay off their college loans. You can’t go into your 60s without working on these.”

That sentiment is backed up by Alice Holbrook, writing for USA Today.  She says, “Reaching your 50s or 60s with very little money set aside for retirement is unfortunate, but it’s not unusual.” There are options available that can help you when you plan on retiring, but haven’t actually done much about the saving part.

saving for retirement

You’ll need to take significant action, and you’ll need to do it immediately. One option is to use an IRA or a 401(k) and maximize your contributions. At age 50, you’re allowed to contribute $30,500 every single year between an IRA and a 401(k) account. Make use of that allowance.

You need to save aggressively, but you need to invest with caution. Don’t let the fear of not being able to retire push you into making risky investment decisions.

For instance, instead of falling for the siren’s call of stocks, diversify with both stocks and bonds. Bond ladders can also help you create an ongoing stream of income over the course of many years, with payouts at predictable, known points.

You may also find that life changes have beneficial effects on your financial situation. Once your kids grow up and move out, you’ll have a lot more liquid capital. That can be used to invest and save. And, as you invest and save more and more, compounding will play a bigger and bigger role, growing your nest egg larger with each passing year.

Reconsider Your Definition of Retirement

Another option is to reconsider your definition of retirement. You can do this in several different ways, including the following:

Retire Later

One option that will give you additional time to save when you plan on retiring is to just push back the date. There’s no rule that says you “must” be out of the workforce by the time you turn 65.

In fact, given the growing number of older workers remaining in their jobs, and retirees coming out of retirement to work again, you might find that this actually meshes with your personal preference anyway.

Start a Part-Time Business

Another option that can allow you to keep planning on retiring is to maximize your income. You can keep working at your current job, but start a part-time business on the side.

Evening and weekend work doing something that you love on your own can give you a significant boost to your savings. In fact, this is a tactic that many retirees use to improve their financial situation once they’ve officially retired.

Plan for Retiring the Right Way

You can also maximize your ability to retire by planning effectively. If you know going in that you’ll end up struggling financially, you can take steps now to ensure that you’re able to live comfortably on less money.

This includes everything from downsizing your home to eliminating expensive habits to exercising more and eating better to improve your health and reduce medical bills.

In the end, being 50 without any retirement savings is not the end of the world. However, it’s time to start planning – retiring without a nest egg is impossible, and now is the time to really buckle down and get started.

early retirement

Sergey Sanko
Sergey had started an IncomeClub after years of being an investment advisor for high affluent investors and managing fixed income securities. He is the lead investment advisor representative and holds a Series 65 license. Sergey earned his Executive MBA degree from Antwerp Management School.
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