Retirement Stage 3 - Age 50 to the "Gold Watch"

Back to blogging after a short delay to move into our new offices! 

This stage of your preretirement could be described as the “bell lap” – a term in track and field where, at the start of the last lap, a bell is rung to signal the final lap.  It also usually corresponds to the runners giving a last, all-out effort.  So too is this period a time when you should go “all out” in your retirement preparations.  Most folks by this time are at least close to the empty nest, at somewhere near their peak earnings, the house may be nearly paid for, and much can be done to pad the retirement account.

First, if you haven’t paid your mortgage and other debts off you should consider it.  It is much easier to start retirement if you don’t owe anyone money.  The same goes with your other debts – home equity, credit cards, parent PLUS loans for your college student, etc. 

Second, if you can, you should max out your retirement savings opportunities like your 401k.  You can put up to $24000 per year away ($18000 and a $6000 “catch up” once you’re over 50).  Even if you haven’t saved as much as you would have liked, this extra boost can make a huge difference in retirement.  Face it – 10 years of max 401k savings could be an extra $240,000 even if it didn’t earn anything. 

Third, start to get a handle on what your budget in retirement will look like.  How much do you have to pay monthly for things you must have, things you would like to have, and things you have always dreamed about.  Facing these numbers early can make for a more contented retirement by helping you decide if and when you should retire and what you’ll be able to afford once you do.

Fourth, start to think about what you will do with your time in retirement.  Once you “pull the trigger” on retirement, you might be going from working 40+ hours per week to 0.  If you’re not prepared to fill the time with things to keep you interested and active, you may want to think twice about retirement.

Finally, give some serious effort to getting yourself in shape both physically and spiritually.  Improving both of these areas will help reduce health care costs in retirement and has shown to improve life in later years.