In a perfect world, everyone would start preparing for retirement when they get their first paycheck. But as Barry Bulakites suggests, that may not be possible for most people. Many things happen in between, and saving becomes a challenge. If you have found yourself in such a situation, here are some ideas on how you can prepare for retirement after 50.

Try to Reduce Debt

When you are 50, you are 10 to 15 years away from retirement. During this period, it will be wise to try and decrease your debt by reducing your reliance on credit. This is the time to take care of any liabilities such as mortgage debt. If you have too many debts, consider debt consolidation, as this will give you some room to breathe. Having no debts means you will have a carefree retirement.

Watch Your Spending

If you want to assess your financial health, you need to understand where your cash goes. Track your daily expenses as they will give you an idea of your spending habits. This also gives you a clear picture of how much income you need to maintain your current lifestyle. From there, you can tell if you need to adjust your spending habits or if you are on the right path to retirement.

Boost Your Retirement Savings

If saving up for retirement was not a priority earlier, Barry Bulakites advises that it is not too late to start. You can decide to make extra contributions to your retirement accounts, also referred to as catch-up contributions. Currently, young people are only allowed to contribute up to $6000 to an IRA and $19,500 to a 401(k). Anyone from the age of 50 can make a contribution of up to $7000 to their IRA, and $26,000 to their 401(k).

Open a Health Savings Account

It is good to prepare for unexpected medical expenses. Aging comes with a few medical conditions, and a huge medical bill can easily deplete all the money you have saved. Retirement planning also needs to consider future medical bills. Creating a health savings account reduces your taxable income. Plus, once you turn 65, you can start making withdrawals with zero penalties.

Live Like You Are Already Retired

When planning for retirement, you will likely try to come up with a sensible budget for that time. As Barry Bulakites recommends, the only way to ensure you can stick to that budget is by trying it out first. If you find it difficult to live within your retirement budget, yet you are working, then it will probably be more challenging when you retire and have more time to spend. So, try to make a few adjustments from the start. Consider taking fewer vacations in a year or downsizing. This is called retirement training, and it will ensure you have enough money for later days.

Planning for retirement can be challenging. However, you do not have to do it alone. Barry Bulakites advises adults to work with financial advisors to help them prepare for the future. This will ensure your retirement years are less stressful regarding money matters.

According to the expert, retirement planning is a process that many people neglect. They think about it when they are nearing retirement age, but by then, it is too late to do anything about it.

This article will share some tips on how you can distribute your retirement money wisely.

Consider your needs

The first thing you should do is make sure you have a good idea of your retirement needs. This will help you determine how much money you need to save and what kind of investments to put your money into. 

Wellman Shew says you need to decide if you want to take the lump-sum distribution or annuity payout. If you choose the lump sum, then you’ll need to figure out how much of that amount you want as a one-time payment and how much of it will be in monthly payments.

If you opt for an annuity, then you’ll need to determine how long it will run and what the monthly payout will be. Shew explains that you can also choose which company’s annuity product you want.

Establish an automatic withdrawal

You should also set up an automatic withdrawal so that you don’t have to worry about this later on in life. Wellman Shew adds that it might be wise to consult with a financial advisor before making any decisions on the best way for you to distribute your retirement money wisely.

Find out how much money you need to retire at age 65 or 70

The most common financial goal for most people is to retire. It’s a goal we all hope to reach one day, and it’s also a very individualized process. The amount of money you need to retire depends on many factors such as how much you spend per year, your current age, your desired retirement age, how long you plan on working, etc.

Understand the risks involved with investing your retirement money

Wellman Shew explains that investing your retirement money is a big decision, and it should not be taken lightly. There are many factors to consider when making this decision. If done correctly, investing can help ensure you have enough money for the future. However, if done incorrectly, it could lead to financial ruin or even bankruptcy. Examples of risks include increasing inflation, unstable interest rates, retirement plans with poor performance, etc.

Understand how taxes impact investment returns

The first thing to understand about taxes and investments is that there are two types of tax: income tax and capital gains tax. Shew says income tax is levied on the earnings from the investment, while capital gains tax is levied when an investor sells stocks or other assets and realizes a gain from the sale.

He holds a business administration degree and has been in the insurance industry since 1982. As the founder and owner of Shew & Company Inc. since 2005, he is a specialist in employee benefits, Section 125 plans, health savings accounts, long-term care, 401k plans, life insurance, and disability insurance. Wellman Shew is currently the agency manager of employee benefits brokerage at his company.