Retirement Planning in your 50’s. Is it too late?
In general, the mindset of people tends to change at around the age of 50 to 55.
Prior to age 50, financial planning tends to revolve around the cash flow planning issues that come up with life-style transitions; such as getting your first job, getting married, buying a house savings for kids education, change of careers, kids go to university, divorces etc. People are busy living their lives, and allocation their cash flow among all the competing needs, including some savings over time.
At 50 to 60 we see a mindset change with Financial Planning. People tend to see they are closer to retirement age (or making work optional) and start to get more serious. They also tend to be in their highest earning income years, so they can really get serious about saving. The 10 years before retirement are key to start the retirement planning process. I have found that while having a long-term plan is essential, it needs to be broken down into 5-year periods in order to be more effective.
For example, if you are age 50, what are the key items you need to do over the next 5 years (5 years is only 60 months) to get your retirement plan on track.
Many people have their RRSPs, TFSAs and investments at various financial institutions, and it is a good time to start to consolidate their investments in order to create an overall portfolio design and to begin to create a retirement and cash-flow plan.
Critical Illness and Long Term Care
Suffering a critical illness in the last 10 years prior to retirement can really derail your retirement plans, so this must be taken into consideration, and reviewed.
Long Term Care is a key factor that must be included in your retirement income plan. Long Term Care insurance is one option that can be considered as part of your overall strategy.
Your estate planning requirements continually change over your lifetime, and you should have your estate documents in place prior to retirement. Around age 50, is a great time to review permanent life insurance as part of your estate plan, as it can be used to pay for estate costs, used to fund your favourite charity, and/or to create a greater legacy. It can also potentially be used to create retirement income.
Jack Lumsden, MBA, CFP, is a Financial Advisor in Burlington with Assante Financial Management Ltd. As an Assante advisor, he can help you gain peace of mind and achieve your dreams for the future. If you are looking for a financial solution that will simplify and enhance your life, please contact Jack Lumsden, MBA, CFP for a confidential consultation.
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