Turning 50 marks a celebrated and important milestone in many ways, and naturally, our thoughts can turn to retirement. If you haven’t built the retirement account you were hoping for at this point, you’re not alone. In fact, the average 45 – 53 year old has only $82,600 set aside for their golden years*.
Work with a Financial Expert
Retirement is about investing in yourself, and that’s exactly what you’ll do by speaking with a financial advisor. This could include financial planners, brokers, and investment advisors. They will assess your needs and help you formulate a plan for where your money will best be put to work for you. Finding a financial professional to advise you may be as easy as speaking with a few family or friends, or it may mean doing a little digging. Either way, here are some quick tips for checking their credentials:
- Determine how they are compensated, such as flat-fee or sales commission.
- Verify their oversight agency is either the SEC or FINRA.
- Consider professionals with RMA or RICP credentials.
Purchase a Life Insurance Plan
When you start saving for retirement later in life, you may end up with less of a nest egg. The most suitable life insurance plan for seniors will give you the peace of mind to spend as needed during retirement and still have the ability to cover final expenses or leave loved ones with a little financial support.
Life insurance for seniors is also affordable, so this doesn’t have to negatively impact your budget. Types of life insurance include:
Term Life Insurance: A type of temporary life insurance coverage that is active during a predetermined period of time, anywhere from 5 to 30 years. Death benefit payouts occur if the policyholder passes away within the coverage period.
Whole Life Insurance: A type of permanent life insurance that does not expire as long as premiums are paid every month. Death benefit payouts are based on the amount of coverage purchased.
For both types of life insurance, the higher the payout, the higher the premium. The best senior life insurance option between these for you depends on a wide variety of factors, including individual needs, financial obligations, and your health status. You may also want to consider purchasing long-term care insurance that will protect your retirement funds should a medical emergency arise.
Prioritize and Minimize Expenses
To make up for lost time saving for retirement, you will have to kick up your contributions to your retirement account. We’ll discuss new sources of income that can help, but the first step is going to be cutting unnecessary expenses. Sit down and take a close look at all of your expenses. What can be trimmed? Where can you save on purchases you have to make? Small savings can really add up over time and will help ease the adjustment to your budget.
Another money-saving option to consider is investing in a Health Savings Account. Medical expenses can be incredibly costly, and this is only going to increase over time as you age. If you qualify for long-term healthcare, your extended medical care like nursing home costs will be covered and you can also open up an HSA. Contributions to it will lower your taxable income, savings grow tax-free, and when you turn 65, withdrawals are also tax-free on qualifying medical expenses.
Start Investing Now
While speaking with a financial advisor should top your list of retirement saving to-dos, you can start investing in your future now with these two immediate opportunities:
Take Advantage of 401(k) Plans and IRA Catch Up Contributions
Many of us are at least a little familiar with 401(k) plans and IRAs. They are types of interest-earning retirement investment accounts that have different maximum annual contributions associated with each. Consider immediately increasing your contributions to the max amount. Those 50 and older can also contribute more than the max as “catch up” contributions. For 2021, the additional contributions for a 401(k) is $6,500 and $1,000 for an IRA.
Open a Side Business
Driving for ride-sharing companies, turning a hobby into a stream of income, even investing in a smart start up are all ways to create a new, additional source of income. This trickle can either act as a boost to your retirement savings or make up for the diversion of funds to your savings accounts. The initial cost of starting a business these days is minimal; you may already have the wheels to drive, the tools to create your product, or know the entrepreneur to support.
Find The Right Life Insurance for Seniors with Americo Today
Finding life insurance – and the most appropriate life insurance companies for seniors – is just a click or call away. Americo Senior Life offers a wide range of affordable, flexible life insurance coverage options that in most cases don’t require a medical exam or lengthy application process.
* Federal Reserve 2016 Median Value of Retirement Accounts for Families with Heads of Household aged 45 – 74