In Your 50s? It's Not Too Late To Transform Your Financial Future: 3 Key Moves To Make Now

Individuals in their 50s often confront a multitude of financial duties, spanning from their children's education expenses to the care of elderly parents, all while trying to save for retirement.

Autumn Knutson, a certified financial planner and the founder of Styled Wealth, notes that a prevalent error is a belief that one's financial trajectory is already cemented at this stage.

Knutson emphasizes the ample opportunity in the 50s to adjust one's financial course for the desired future.

Among the pivotal financial strategies for this age group are securing long-term care insurance, maximizing 401(k) contributions, and diversifying tax obligations.

“In your 50s, you still have sufficient, if not ample, time to make the changes you want to make for the life you either want now or the life you want in your future and for your 60s and 70s,” Knutson told CNBC.

Long-term care insurance becomes increasingly crucial as one nears retirement, with Andrew Fincher, a CFP, highlighting the potential for high premiums in the 60s and the flexibility offered in the 50s.

“Once you get to your 60s, insurance companies really jack up the premiums and it can be very costly,” Fincher told the outlet. “In your 50s, there’s a little bit more flexibility there to cover any cognitive disabilities. Having coverage on that can really help from hurting your spouse or your children.”

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According to Genworth’s 2023 Cost of Care survey, the median cost for a private room in an assisted living facility has reached $64,200 annually, underscoring the importance of early coverage.

Increasing 401(k) contributions is another crucial move, with Marguerita Cheng, a certified financial planner, suggesting a 1% annual increment for those not already at the contribution cap, according to CNBC.

Under certain assumptions, this approach can significantly bolster retirement funds, adding approximately $16,779 by age 67 for a 55-year-old earning $80,000 annually.

The third key strategy is diversifying investment accounts beyond retirement-focused ones, as explained by Joe Conroy, a CFP.

He tells CNBC that investing in a taxable brokerage account can offer tax advantages compared to the standard income tax rates applied to IRA withdrawals, providing a more balanced financial portfolio for retirement.

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