Everyone knows that building wealth is important at any age, and especially so as you approach retirement. But not everyone is able to start saving for retirement or save as much as they would like early on in their career. Whether you had unexpected expenses, lost money in a bad investment, or simply weren’t able to get ahead, there are many reasons why people start saving later in life. Instead of focusing on what you don’t have, take control of your financial life by following these steps. It’s not too late to build and protect wealth to carry you into retirement.
Consider these tips to help build wealth over age 50:
- Build up your retirement nest egg. Any additional money you can put directly toward retirement helps. Holiday bonuses, tax refunds, and inheritances provide great opportunities to beef up your retirement accounts.
- Take advantage of catch-up contributions. Once you reach 50-years-old, you can make “catch-up contributions” to your retirement accounts. You can contribute $6,500 above the $19,500 standard yearly limit to your 401(k) and an additional $1,000 above the $6,000 limit to your IRA.
- Downsize your home. Moving to a smaller home can help you save money on taxes, utilities, and insurance. You can then apply these savings to your retirement fund.
- Purchase long-term care insurance. Purchasing long-term care insurance is not as much about building wealth as it is maintaining wealth. With yearly nursing home costs of more than $75,000, long-term care insurance helps protect your wealth in the event you can no longer take care of yourself.
- Hold off on receiving Social Security benefits. You can choose to start receiving your Social Security benefits as early as 62-years-old, but will only receive 75% of your benefits. If you wait until the full retirement age of 66, you receive 100% of your Social Security benefits.
- Pay down debt. Carrying credit cards, loans, and mortgages into retirement can be costly. Be strategic about what you pay down and when. Experts often recommend tackling the most costly accounts first. Don’t let debt payments preclude you from continually paying into your retirement accounts.
- Manage investment risk. Review your asset allocation strategy and start moving towards more conservative investments. The returns may be less, but you may have more security against market volatility.
There’s no age limit on building wealth. Wherever you are in your life, you can make a few smart and strategic changes that will pay off in the long run. If you want to learn more about wealth-building strategies, contact a Fifth Third Bank financial advisor.