4 ways your retirement savings strategy should change after you turn 50

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After turning 50, your retirement planning enters a new phase.

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  • After turning 50, you’ll need to start approaching retirement planning differently. 
  • Now is the time to make a strategic plan for taking Social Security payments, and find ways to pare back your spending.
  • Start by listing all the retirement accounts you’ve saved in, and figuring out what money you have to work with. 
  • Then, start to adjust your equity allocation to be more conservative. That might mean reducing the portion invested in stocks, which are more volatile, and increasing bonds, which are more stable.
  • Read more personal finance coverage »

Turning 50 is a big deal, especially in your financial life. 

After turning 50, it’s time to start rethinking the way you’ve always done things, become a little bit more conservative with your investments, and start planning ahead.

Rhian Horgan, CEO of financial technology company Kindur, and founder of retirement planning app Silvur, says that there are four things that should change after this milestone.

1. Track down all of the accounts you’ve created over the years

After years of switching jobs and changing banks, it can be hard to actually know what you have to work with. “By the time you get to 50 or 55, it’s not uncommon for our customers to have money in eight to 10 different accounts,” she says.

“The first step is to actually understand what you have,” she continues. “We find that for most people, even getting that information takes them some time.” Gather up all of your accounts, and start to understand what you’ll have to work with in the future. 

2. Focus more on cutting costs, and less on accumulating

By the time you turn 50, the bulk of your saving should already be done. Even if you’re still working and saving some, planning to make the money you have saved last is often more effective than finding ways to save more at this age.

“Once you get past 50 and into your 60s, the mindset is shifting into decumulation and figuring out how you can spend down your money safely over time,” Horgan says. You might start strategizing more about taking on part-time work, or how to delay taking Social Security payments as long as possible. 

You might also want to start paring down your expenses and lifestyle to fit the savings you have, including paying down debt before retirement, or reducing your costs by downsizing.

3. Start strategizing your approach to Social Security income

Social Security income will be something you’ll start thinking about much more after 50 than you ever did before. 

For most people, this steady income is an essential part of retirement planning. And, taking it at the right time is critical to getting the most money possible. Delaying your claim until you reach the full retirement age, currently age 66 or 67 depending on the year you were born, will help you get the most money possible. 

“Every year that you delay Social Security, you, you get an 8% higher payout,” Horgan says. While you can start receiving benefits as early as age 62, waiting could help you receive more money later. By creating a strategy to hold off on claiming Social Security as long as possible now, you could get higher payouts when you’re older.

4. Consider being more conservative with your investments

Generally, as you get older, your investments should become more conservative. If you have most of your retirement funds invested in stocks, it might be time to reconsider how you’re invested.

“How dependent are you on that markets portfolio for income in retirement?” asks Horgan. If you plan to depend on your savings and investment income to cover your retirement costs, you won’t want to risk it. But, there’s a fine line between being too invested, and being under-invested and being exposed to inflation. “Is that portfolio going to grow enough to cover the inflation that that’s ever going to be exposed to as a retiree?”

After you turn 50, it might be time to re-evaluate your asset allocation: the mix of cash, stocks, and bonds to put your portfolio that will protect you from inflation, but still be safe and reliable. 

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