Whatever your circumstances, your 50s should be a rewarding and pleasurable time. This week, we’re going to talk about some things you should be doing to make your 50s a financial success (as always, I’m assuming you have the good habits we discussed in the articles on your 20s, 30s, and 40s).
1. Smell the roses
A common theme in feedback on this series is it’s all self-denial and saving; no indulgence. So I want to go on record that I am very much in favour of affordable indulgences.
I love travelling, but I am also very committed to a serious savings plan that has me putting away about 20-25% of my after-tax earnings every month. So where does this leave me?
Simple – I structure my lifestyle to meet my savings goals and have money left over to finance trips abroad. My home is more modest than I could afford, and I don’t often eat out or splurge. Managing my spending and expenses means that I can save 25% of my earnings and put away another 5% or so into my travel fund.
Your 50s decade is a time to think about indulgences. Love golf? How about a smaller home (practical with the kids out), and a tour the world’s famous golf paid with the savings? Love beauty treatments? Cut back on eating out and use the spare cash to get your spa on. You can be smart, be on schedule with your savings, avoid debt, and indulge in the things you love.
2. Financial temperature
If you aren’t already ready for a golden retirement, now is the time to take financial stock. Draw up a household balance sheet. On the one side, record all your savings, retirement accounts, your home equity (what your home is worth less whatever you owe on your home loan, if this is a negative number it goes on the other side of the sheet), and any other assets. On the other, record all your debts – negative home equity, credit card debt, car loans, your Mr Price account balance and anything else.
Compare the two sides. Have you saved too little for retirement? Now’s the time to clean up that balance sheet and start preparing for retirement. Pay down your debt (I know, I’m a broken record, but carrying debt is crazy), ramp up your retirement savings and make sure you’re in good financial health.
3. Work healthy; plan sickly
You’re 50; you’re feeling the aches and pains of ageing. It’s not fun, but it is something you need to plan for. Revisit your life and disability policies, make sure you understand how your medical scheme works and what will happen with it when you retire, and take the time to update your will and make your wishes clear to your family.
You should also be getting very serious about your health which is a function of what you’ve been doing for the last 50 years. Hopefully you are getting at least 30-45 minutes of exercise a day, eating a healthy, diet, maintaining a healthy weight, managing stress, getting annual check-ups, and taking any daily medications you need. If you aren’t, start today. Your retirement will be a lot more fun if you’re healthy enough to enjoy it.