Knowledge Center
Retirement Planning at Age 50: Building a Roadmap to Retirement
investing-my-money | Read Time: 3 minutes
By Ted Quillen, CFP®, AIF® | Published: February 2022
Depending on who you ask, some say 50 is the new 40, others say 50 is the new 30. Whether you feel like a 30-year-old or 40-year-old, one thing you don’t have at age 50 is as much time on your side before retirement. At age 50 we’re entering the final one-third of our working years, and typically these are the most critical years when it comes to making sure we properly plan for retirement.
If you haven’t spent the first 2/3’s of your career diligently planning and saving for retirement, don’t panic, there’s still time to get a plan in place. Even if you’ve done a great job at saving it’s still an important time to make sure you have a solid roadmap to retirement.
Set a goal
If you were born after 1960 your full Social Security retirement age is 67. Maybe your goal is to retire sooner or work longer, and this might change over the next 10 to 15 years but having a goal to work toward is important. The retirement age goal may be dictated by the lifestyle you plan to live and the amount of income you’ll need in retirement.
Once you’ve set a retirement age goal it’s time to evaluate your current retirement savings. Not sure exactly how much you have saved? This is the time to round up your current 401(k), 403(b) and IRA statements. Don’t forget about any 401(k) accounts you may have had at a former employer or any pension plan income you may be entitled to. The rule for someone age 50 who intends to retire at age 67 is you should have six times your annual salary saved for retirement.
How much should I plan to save?
Now that you’ve identified an age when you’d like to retire, next comes creating a plan to reach that goal. If you intend to retire at age 67 you should have 10 times your annual salary saved at that time. It’s at this point that the assistance of a Certified Financial Planner™ Professional may be helpful in calculating how much you’ll need to save. A planner can use your current savings, income, projected growth and savings rates to calculate a future value of your assets. As part of this planning, you’ll want to include your future Social Security income and any other income sources you may have in retirement.
Haven’t saved enough?
If you’ve found that you haven’t saved enough so far, there’s still time to catch up. This would be the time to start saving as much as possible in retirement plans. In 2022, individuals who are 50 and over, can contribute up to $27,000 to your 401(k) or other qualified plan, which includes a catch-up amount of $6,500. If you’re already making the maximum contributions to these plans, you may be able to make contributions to a Roth IRA depending on your modified adjusted gross income.
Staying on Track
Once you’ve formulated a solid plan, remaining diligent and continuing to save is the next important step. As contribution limits increase in retirement plans, be sure to increase your contribution amounts. Review your plan at least annually to make any necessary adjustments to your savings, spending and investment strategies. If this sounds like an intimidating task, enlist the help of a Certified Financial Planner™ professional to provide objective guidance and the tools to keep you on track.
About the Author – Ted Quillen, CFP®, AIF®
Ted Quillen is a financial advisor with WSFS Wealth Investments and offers securities and advisory services as a Registered Representative and Investment Advisor Representative of Commonwealth Financial Network®. He graduated from the State University of New York at Cortland and is a CERTIFIED FINANCIAL PLANNER™ Professional. Mr. Quillen can be reached at tquillen@wsfsinvestments.com. WSFS Wealth Investment, 3801 Kennett Pike, Suite C200, Greenville, DE 19807.
The financial advisors of WSFS Wealth Investments offer securities and advisory services through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. WSFS Bank and WSFS Wealth Investments are not registered as a broker-dealer or Registered Investment Adviser. WSFS Bank and Commonwealth are separate and unaffiliated entities. Fixed Insurance products and services are offered through CES Insurance Agency.
Investments are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Funds are subject to investment risks, including possible loss of principal investment.
Related Articles
Cryptocurrency 101: Here’s What You Need to Know
The topic of cryptocurrency is discussed by pundits on the news, influencers on social media, and people trying to make small talk. You would think with how much cryptocurrency gets mentioned we would all be experts by now. But it feels like when you try to ask someone what cryptocurrency is or why they own it – they can’t seem to give you a straight answer. The conversation either becomes technical with new jargon you haven’t heard of before or half-baked responses with generic buzzwords. Whichever kind of crypto “expert” you ask though, their conclusion ends up being cryptocurrency is “the future.”
Read More
Five Top Tax Strategies for 2022: Tips to Maximize Savings
Tax planning can feel like a buzz word to so many at the end of the year. But what does it mean? Am I doing everything I “should” be? And what happens when the clock strikes twelve, ringing in the new year? Is all hope lost for efficient tax strategy until the following December? The new year can be a time of resolutions and new commitments for many. Implementing an efficient tax strategy now can help make year-end planning conversations run smoothly.
Read More
Market Minute: The Latest on the Markets and Economy
The markets and the economy are ever-changing, making it hard to keep up sometimes. Let WSFS help you make sense of it all. Tune in to our Market Minute update from Andrew N. Davis, CFA®, Director of Research at West Capital Management, a subsidiary of WSFS Financial Corporation.
Read More
The Simple Four Step Guide to Estate Planning
Putting together an estate plan to ensure your family is well cared for in the future is important for everyone. Regardless of your level of wealth, taking stock of what you have and creating a plan to provide guidance to family and friends about your choices is imperative. Without it, a court may need to step in to authorize certain decisions on your behalf and state law to determine who will inherit your assets. Everyone should take these four steps to ensure they have a plan in place.
Read More
Stay On Track by Setting Small, Short-Term Financial Goals
It’s been hard to ignore some of the massive returns seen in the financial markets over the past few years. Be it cryptocurrencies or meme stocks, the idea that you can double, triple, or quadruple your money in a matter of days or weeks can be extremely tempting, but is akin to gambling. Behavioral finance teaches us that we as investors are not always rational. We can be overconfident or react without thinking things through, which can cause us to lose sight of our financial goals. Long-term goals, like retirement savings, are built on your money decisions made today. The below three short-term goals are no different, but keep in mind that your risk appetite and return expectations should be tempered.
Read More