6 financial moves to make in your 50s and 60s
Once you hit your 50s and 60s, retirement is no longer something happening far off into the future.
In fact, it’s at your doorstep.
Now is the time to really figure out where you stand financially, reassess your long-term goals, and focus on planning your future.
Here are six smart financial moves that may make the next few decades the best years of your life.
1. Decide on your retirement lifestyle
With a clear idea of the type of retirement lifestyle you’re after, you can start implementing a plan to turn your retirement dreams into reality.
Some things to consider are:
- How often you would like to travel – and the types of holidays you’d like to take Your travel plans might have gone out the window for now, but that doesn’t stop you planning for the future
- Whether a sea change or tree change is part of your plan?
- Downsizing – or upsizing. What are your accommodation plans in the future?
- Do you want to provide financial assistance to your family?
- In your later years, what options would you like to have in relation to help and support at home, or perhaps in a retirement village or aged care facility?
2. Seek help from a professional
If you value the experience of experts in other aspects of your life, don’t discount it when it comes to managing your life savings.
A financial adviser is not just someone who helps with investments. Their job is to help you with every aspect of your financial life—savings, insurance, tax, debt—while keeping you on track to achieve your goals.
More importantly, they can answer questions like:
- What age can I stop working and retire?
- What strategies can I use to build my wealth?
- How can I ensure my wealth is transferred to my children?
If your to-do list is endless and you never quite have time to tackle your personal finances, Fortress can help to set you on the right track.
3. Increase your retirement savings
One way to ensure you can enjoy your desired retirement lifestyle is to add more into your super on a regular basis.
You can do this using your before or after-tax income. If you make a personal contribution, you may be eligible to claim a tax deduction too. This means you’ll reduce your taxable income and potentially pay less tax, while adding to your super balance. It’s a win-win!
Be mindful of contribution caps though. They limit the amount of super contributions you’re able to make each year if you want to avoid paying tax at your marginal tax rate rather than the concessional rate of 15%.
4. Pay off your debt
The lower your expenses in retirement, the longer your savings will last.
So, if you have significant debt, you should also have a plan to proactively clear that debt, such as mortgage repayments or personal loans. This will strengthen your financial position when you retire.
Speaking to a financial adviser at Fortress can help determine the best way to reduce your debt as you move into retirement, while also making sure your saving towards retirement is on track.
5. Diversify your investment portfolio
At this stage in your life, you don’t want your investments to be derailed by external market factors which are out of your control.
Investing your money across multiple different asset classes—shares, property, bonds, cash—will help to lower your investment risk. This strategy—diversification—works because different investment types perform well at different times so if one area of your portfolio falls, another may be rising. Having a variety of investments helps balance out your overall risk.
We can review your investments to assess where you currently stand and determine if your investment portfolio needs adjusting.
6. Set up an estate plan or a will
An estate plan is a collection of legal documents that outlines how you want your assets distributed when you die. Crucially, it also includes how you want your health and financial decisions handled (and by who) if you’re unable to make them yourself.
Most estate plans have a will which names an executor to manage the distribution of your assets as you intend. A solicitor (or the Public Trustee) can help you with this.
In essence, having an estate plan in place can help you feel more confident about the future, knowing your loved ones will be taken care of, and that the legacy you leave behind is the one you want.
Key takeaways:
- Once you understand the type of lifestyle you want in retirement, you can start implementing a plan
- Adding more to your super on a regular basis can help to increase your retirement savings
- An estate plan is important to ensure your wealth is passed on to who and how you want.