9 Savvy Financial Moves to Make in Your 50s

When you’re in your 50s, you likely have many different responsibilities on your plate. Plus, retirement starts to creep up. As you move forward, making some savvy financial choices can set you up for a brighter financial future.

Let’s explore some of the best money moves to make in your 50s as you plan for retirement.

Hitting your 50s might be a wake-up call that retirement is nearing. It’s a good time to take stock of your retirement savings. If you’re on track for a financially solid retirement, then stick to the plan. But if you are concerned you might not have enough, it’s time to give your savings a boost.

Now that you’re in your 50s, the IRS allows you to tuck more away into your tax-advantaged savings accounts each year. As of 2024, eligible employees can contribute up to $23,000 to their 401(k). But savers over age 50 can contribute an additional $7,500.

Take time to evaluate your current debt burdens. If you have excessive debts or high interest rates attached to your loans, reducing that burden is critical.

Make a plan to crush your debt. If you aren’t sure where to get started, consider the snowball method. This involves paying off your debt with the lowest balance first by putting all extra funds toward that debt. Once you pay off that debt, you can roll the funds available for debt repayment into your next largest balance. Repeat the process until you’ve eliminated all of your debt.

Now is a good time to assess your insurance situation. Specifically, consider long-term care insurance.

If you want help paying for potential long-term care, locking in an insurance policy in your 50s is ideal. If you wait until your 60s, the cost of a long-term care plan might be prohibitively expensive.

Although tapping into your Social Security payments likely won’t be an option for years to come, it’s a good idea to get clear on the program’s rules. With a better understanding of the rules, you can avoid uncomfortable surprises later.

For example, you might discover your eligible retirement age is a bit later than 65. Or you might realize your payments will be less than you previously expected. It’s better to find this out now than when you retire.

Of course, no one wants to think about dying. But it’s smart to have a plan in place. You can save your family a lot of unnecessary heartache and hassle by clearly stating what you want to happen to your assets in estate planning documents, like a will.

If you aren’t sure where to start, consider working with an estate planning attorney to get your documents in order.

If you have kids, it’s a good time to reevaluate your financial relationship. Although you may want to help your kids, it’s important to take care of your future finances first.

Depending on your budget, there might be plenty of room to save for your future and provide financial support to your children. Be realistic about what’s possible before committing to ongoing financial support for your kids.

Life has a habit of throwing unexpected expenses your way. If your emergency fund is light, it’s a good time to top it off. Experts recommend saving between three to six months’ worth of expenses in an emergency fund.

When possible, stick these funds in a high-yield savings account to make the most of your funds.

If you’re planning for retirement with a partner, it’s important to get on the same page about your financial future. Build out a retirement vision together, including how you plan to pay for the next chapter of your life. You can both decide how long you’ll each continue working and what investment vehicles you’re comfortable with.

Housing is one of the biggest costs in most American budgets. Depending on your situation, downsizing could offer the right solution for figuring out how to pay for your housing costs in retirement.

Evaluate how much space you truly need. If you could be happy with less space, consider making the move now to free up space in your budget. You could direct those savings toward building a more stable retirement.

As you hit your 50s and prepare for retirement, it’s a good time to take a close look at your financial situation. Making small changes now can set you up for a brighter financial future.