Tips For Saving For Retirement In Your 50s

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Retirement is one of the most important issues for Americans, but ironically most Americans don’t actually start saving for retirement until they are well into their 40s or even 50s.

Although it is never too late to start, waiting until later in life to begin saving is certainly detrimental to an overall retirement plan. Nevertheless, at the risk of sounding like the glass is perpetually half empty, there are certain specific mistakes that can be made even by people who began a solid retirement savings strategy in their 20s and 30s.

Maximizing investments and avoiding common mistakes are just some of the keys to retiring comfortably.

It is important not to continually re-evaluate your retirement strategy and make sure that your plans are staying in line with your income and the ever-changing economy.

You may hear investment brokers say things like “even a million dollars just isn’t what it used to be." In other words, what would have passed for a comfortable retirement a decade or two ago isn’t going to go as far these days.

Bottom line: Be sure that the plan you started years ago still fits the lifestyle you currently have and the one you want to have after you retire.

Don't be afraid of conservative investments.

High risk portfolios are great when you have money to burn and can afford to lose a few dollars on the occasional roll of the dice. But high-yield investments, while as alluring as that the proverbial shiny new toy, can be deceptive and if it goes bad, it could put a serious dent in your savings plan. The later in life you decide to make risky investments the more significant that dent is going to be.

Bottom line: Be patient. Adopt a conservative mindset. Work with your advisor on taking the tortoise approach rather than the hare approach.

When it comes to financial advisors, make sure you are working with one who knows what he or she is doing.

That may sound like an overstatement of the obvious, but some of the nicest and most trusting people have been burned by ill-equipped advisors who may have meant well but really didn’t have the experience and knowledge base to handle someone’s retirement path competently.

Bottom line: It is critical to have a quality team of wealth management gurus from the moment you begin your retirement account, but it becomes even more important the later in life you begin saving.

Resist the temptation to take out a new 30-year mortgage if you are over 50.

Actually you should resist that temptation even if you are still in your 40s. The logic – albeit flawed – behind taking out a mortgage like that is that even when it is taken out in a person’s late 40s or early 50s, that person still believes he or she will be able to pay it off in time for retirement. With a good strategy, it may be possible to pay off the principal, but people seem to easily forget about the interest and end up getting burned.

Don't make that mistake. Be conservative.

Bottom line: Do your best to maintain the lifestyle you had when you started planning. And remember that even a million dollars just isn’t what it used to be.

Related: When should I retire? Is 65 now too young?



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Retirement , Basics , Careers

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