As you head into your 50s, you may be approaching the peak of your career and earning potential and it’s also a time when you may start to think more about retirement and financial security. This is a critical time when it comes to earning, saving and preparing for the future so it is important to avoid making costly financial mistakes during this crucial stage of your life.
Here are the top three financial mistakes to avoid in your 50s:
Not saving enough for retirement.
One of the biggest financial mistakes you can make in your 50s is not saving enough for retirement. Of course, we advise that you start saving for retirement as early as possible, but if you haven't already started, it is not too late to catch up. However, it will require more diligence and sacrifice to reach your retirement savings goals.
If you have not yet started saving for retirement, now is the time to do so. In most scenarios you should aim to save at least 15% of your income for retirement, but ideally closer to 20%. If you are already saving for retirement, consider increasing your contributions. Every little bit helps and the sooner you start saving, the more time your money has to grow.
Not having a diverse investment portfolio.
As you approach retirement, it is important to diversify your investment portfolio. A diverse portfolio helps to spread risk and can potentially lead to higher returns over the long term.
It is common for people in their 50s to have a significant portion of their investments tied up in their home and in their retirement accounts. While these are important assets, it is important to also have a diverse range of investments, such as stocks and bonds which our adviser Paul can arrange through his wealth of knowledge on managed funds.
This is where having a financial adviser like Paul is critical as we can support you to diversify your investments appropriately.
Not having a plan for long-term care.
Long-term care is something that many people do not like to think about, but it is an important consideration in your 50s. Long-term care refers to the ongoing medical and personal assistance that may be needed as we age. This can include hospital operations, specialists visits, in-home care, assisted living, or nursing home care.
Long-term care can be expensive and it is important to have a plan in place to cover these costs. Savings and a good health insurance policy can help make this plan come together much easier later in life when it is needed most.
Make sure you get the advice from our Financial Advisers who specialise in health insurance to get this right as policies can differ wildly and the right approach will change depending on your age and stage in life. Being aware of life insurance products and how they can vary as well as trauma insurance will be very helpful also.
By avoiding these three financial mistakes, you can set yourself up for a secure and financially stable retirement. It is never too late to start saving and planning for the future, so take the time to assess your financial situation and make any necessary changes. With a little bit of planning and effort, you can ensure that your 50s are a time of financial security and stability. Please get in touch to help secure your future. 0800 230 235.