Planning for retirement while in your 50s

As retirement approaches, careful planning becomes essential to help ensure a secure and fulfilling future. Transitioning from active employment to retirement involves more than just financial readiness – it requires a comprehensive strategy that addresses income, healthcare, lifestyle, and estate planning. Understanding the key considerations in retirement planning can help you make informed decisions, helping you to enjoy your next chapter.

In this article, I sat down with my colleague and wealth planner Brandon Fish, ChFC^®, RICP^® to elaborate on retirement planning considerations for those approaching this exciting milestone. As a Wealth Planner, Brandon advises high- and ultra-high-net worth clients in a range of financial planning matters including retirement and estate. He often is researching ever-changing legislation and contributes to the Private Bank’s Educational and Insights libraries. His education from Northern Kentucky University and The American College of Financial Services, plus eight years in the Marines, provides unique insight.

“Personal and professional needs and goals could shift dramatically, however, when you reach your 50s,” Brandon says. “Life as you’ve known it may begin to change. Perhaps you’re empty nesters, caring for aging parents, enduring health issues, or considering downsizing. Whatever your unique situation, priorities and goals can often shift slightly or significantly as we age, which is why it’s vital to sit down and focus on whatever the next decade and beyond may look like.”

Determining your goals

Brandon said that you may not have a clear idea at this point what your retirement goals will look like, exactly; however, the picture will organically take shape as you act upon your wishes.

Here are some soft goal suggestions to consider:

• At what age do you intend to retire?
• Do you wish to retire as soon as possible, or can you consider multiple targets?
• What if you’re unable to retire due to financial or other barriers?
• Have you thought of a gradual retirement, such as reducing responsibilities over several years?
• What does your retirement lifestyle look like:
  • Extensive (and maybe costly) travel?
  • Expensive hobbies?
  • Relocation to another part of the country?
• Will there be family that need care or financial assistance?

Assess your current financial situation

Once you’ve set some soft and hard retirement goals, you can then start to evaluate your situation and either begin planning or adjust your current plan accordingly by taking the following steps:

• Review your budget and current debt to establish what your retirement expenses might look like.
  • Is it beneficial to paydown/payoff certain liabilities or could that cash be used in an investment vehicle assisting in funding your retirement goals?
• If you do have high-interest debt, aim to eliminate it by either paying it off or consolidating to a lower rate.
• Develop and maintain a personal financial statement that lists all assets, such as retirement/investment accounts, real estate, and liabilities.
• Evaluate your retirement savings strategy, asset type diversification, and assess investments to see that they’re suited to meet your retirement goals and risk tolerance.

Retirement income

Try to determine how you might feel once you’re no longer receiving a regular paycheck, though hopefully you’ll have other sources of income.

According to Brandon, the two most common forms of retirement income are pensions and Social Security payments. You’ll want to begin educating yourself on your specific payout options along with deferred compensation and other employee benefit accounts. Combining these resources and your investment portfolio can create an effective and somewhat predictable “paycheck” strategy.

Risk protection

One’s insurance needs typically change as retirement nears. When we begin our careers, we’re in the wealth accumulation phase of life. This includes purchasing insurance for income replacement in the event a spouse passes away and the surviving spouse is left to care for themselves and dependents.

“Later in life, the focus is wealth preservation, and the scope of insurance coverage shifts to covering other risks such as a long-term care event,” he says. “Long-term care costs could devastate existing resources needed for retirement.”

Consider the following when re-examining your insurance needs:

• Medical history of each spouse and their extended families. Purchasing long-term care coverage earlier could save on premiums and limit the possibility of being denied coverage later.
• Is your life insurance over-funded? If the current death benefit is more than what might be necessary, consider using cash value or a 1035 Exchange to obtain a hybrid policy. This would allow for a continued death benefit while protecting against a long-term care event. If there are multiple life insurance policies, one could be maintained for beneficiaries while the other could be exchanged for a long-term care policy.
• Are you underfunded? If you’ve used term life insurance policies through an employer due to cost and convenience, consider something more permanent that better suites your retirement or legacy goals on the open market.

Estate planning

When you reach your 50s, your estate plan should be evaluated and possibly updated because several variables may have changed. When examining your wills, trusts, and personal directives, circumstances may require changes to the following:

• Who’s responsible for executing your documents and are they still up to the task of doing so?
• How is your estate to be distributed and to whom?
• Do you have adult children that may require care you might be unable to provide later in retirement and after you’re gone?

Getting the advice you may need

Review and revise your plan at least annually as you approach retirement to better prepare you for the next chapter. Retirement doesn’t have to be a stressful life change–proper planning in advance can facilitate a smooth transition and allow you to embrace and enjoy retirement. To learn more, please contact your Huntington Private Bank team to see how we can help, or find a Huntington Private Bank Office near you.