Investing in Your 50s: Getting Serious

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If you haven't already, your 50s are a time to really start buckling down. In your 50s, you can actually see retirement on the horizon, and all that comes with it, and that makes your goal a little more tangible. Use that to your advantage -- cut out a picture that reminds you of the house on the beach you hope to live in or the vacation you want to take -- when you're following these tips:

Don't Let Up

You can see retirement, but that doesn't mean it's close. You may still have 10 to 15 years in the workplace ahead of you, if not more. Many people are planning to work through retirement these days, whether that's continuing with their current company or picking up a part-time job.

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That means the money in your retirement stash has more time to bounce back from an upset, so don't start pulling in the reins on your asset allocation, says Doug Kinsey, a financial planner and partner at Artifex Financial Group in Ohio. "If you're talking generically, someone who has 10 or 15 years until retirement, we're still in general going to favor more of a balanced portfolio -- 60% in equities or growth investments, 20% in alternatives and the remainder in bonds."

Adapt


If your kids are off at college or out in the real world, or they be soon, and you haven't reassessed your finances, now's the time. There are lots of opportunities to scale back when you're left with an empty nest. You can likely change your insurance coverage, eliminate your kids from your health plan (if they have other coverage), downsize your grocery-shopping list and put your kids in charge of filling their own closets. Once you've made these changes, that money should immediately goes toward retirement before you have a chance to spend it.

Catch Up

Many people are still not where they want to be at this age, and that's OK. You could very well be in your peak earning years right now, which means you can really start hammering it home. If you don't want to work longer, you have to save more, says Kinsey, and once you hit age 50, you're eligible for catch-up contributions in your 401(k) and IRA. In 2010, you can contribute $22,000 to your 401(k) and $6,000 to a Roth or Traditional IRA. Start contributing the combined maximum -- $28,000 -- at age 50 and, invested wisely, it could grow to over $400,000 by the time you turn 60. That's what I call making up for lost time.

Get Help.

If you haven't worked with a financial planner before, now might be a good time to get an assessment. You can find one that charges by the hour through the Garrett Planning Network, and the (relatively small -- most charge around $200 an hour) cost will be well worth it. A second pair of eyes on your situation can help you assess where you stand and find holes in your planning, especially as the markets bounce back from the recession.


Also in this series:
20s: Getting Started
30s: Boosting Your Health
40s: Envisioning the Future
60s+: Pacing Yourself
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