As working adults every life stage or decade brings with it a couple of financial priorities to master. While in your twenties, it is essential to cultivate a habit of saving. In your thirties the most crucial financial priority is to get your retirement savings on track, and in your forties saving for things like your children’s education is essential.
Now as we look to the last decade before retirement, the most important financial element to focus on is obvious: saving for retirement. And although it is a fundamental priority, it is not the only one.
Here are the top 4 money priorities to master in your fifties:
1. Bump up your retirement savings
During this time of your life you will probably be earning the most you have ever earned. That is why you should also during this time contribute a considerable amount of your monthly salary towards retirement. If you have fallen behind on payments during your forties, the time to catch up is now.
Tip: A great way to bump up your retirement savings even more is by downsizing what you can. Once the kids have left the nest, do you still need the big house and two cars? Downsizing the things you don’t need for more appropriately sized assets not only save you money every month on instalments but it can also save you on maintenance and upkeep.
2. Medical aid & old age planning
It is nothing other than depressing to think of these types of what ifs but as with anything in life it is better to be safe than sorry. While in your 50s your parents or the parents of friends are most likely in their 70s or 80s and you will have a better understanding of the needs of someone at that age. Therefore plan ahead and make sure that you have suitable medical aid plan etc.
3. Don’t forget your emergency fund
By now you have hopefully come to know and value the importance of the emergency fund. During this phase of your life the emergency fund is more important than ever. If the unforeseen happens i.e. you are retrenched, it will be that much more difficult for you to bounce back. This phase of life requires the most from you financially and you cannot skip payments or fall into debt.
Tip: Apart from contributing a set monthly amount, consider paying your annual bonus and tax refund into your emergency fund until your reach retirement.
4. Get rid of debt
Tackling debt is something we urge in every life phase, but in your 50s it becomes vital. Your debt cannot and should not follow you into retirement. Get rid of your debt during your fifties by making a debt plan or if you are struggling to do so, get professional help.
At Debt Rescue we want to help you manage your debt and monthly cash flow better by helping you pay back what you can afford.
If your debt is holding you back from better future planning, talk to us.