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Getting ahead in your fifties

You have worked hard, saved hard, almost paid off your mortgage and the children have left the nest and are now financially independent.

For most, this shift occurs in your fifties; your financial commitments lessen and your focus shifts towards your future.

The reality is, when you are in your 50s you can see retirement on the horizon. It might still be 15 years away, but you realize these next 5-15 years can make a huge difference financially if you plan carefully.

A great way to take a glimpse into your retirement years is to use a retirement calculator. It will give you an indication of potential shortfalls and options to bridge those gaps. Try the website www.pensions123.com and on the main page it has several calculators that specifically address retirement planning.

Once you have identified potential pitfalls I would strongly suggest speaking with a financial professional who can work with you to devise your retirement plan.

Many people in their 50s may be at the peak of their earning years. That means you have a chance to save more and invest those funds to grow long term. I recommend to anyone who is looking to save additional funds do so through their Company Pension Plan.

Instead of just contributing the mandatory 5%, review your budget and if you can afford to contribute more [for e.g., what you used to pay for your mortgage], those savings will really add up. The big benefit for voluntary contributions to your Company Pension Plan is that your employer deducts straight off your pay cheque, which provides a straightforward approach and requires no effort by you.

Once you start on the road to saving more money, the next step is to make sure you are investing those funds wisely. You need to count on your retirement money so now is not the time to speculate on investments; a balanced and diversified investment portfolio is key.

It’s important to look at everything when making investment decisions including your bank accounts and all investments as well as your pension funds. Since retirement is your goal, make sure your investing matches your time horizon. This will affect your asset allocation, meaning you take on an appropriate amount of risk / reward relevant to your goals.

Another area people tend to not think about is consolidating their assets and accounts, for e.g., how many bank accounts and credit cards do you really need? How many investments accounts do you need? How many individual pension plans do you need?

As you gear up towards retirement, streamlining your assets and accounts and figuring out exactly what you need is important. Scaling back the number of accounts you have should provide a clearer indication of where you stand in relation to your retirement goals.

Lastly, an area which is often forgotten is life insurance. For most people life insurance covers the “what ifs” in life. When you are in your 50s having the right amount of life insurance is really important as those “what ifs’ become statistically more likely to occur because you are older.

At the end of the day planning in your 50s and beyond is key. Whether you have a lot or a little when you retire depends on how you plan, save and invest today. We are here to help.

Article published in Bernews, June 23, 2016

Contact Carla

Freisenbruch Meyer Group staff photo: Carla Seely

Carla Seely

VP, Pensions & Investments

Tel: 297-8686
Contact Carla

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