Six Retirement Planning Tips for Those Over Age 50

Investors aged 50 and older have many opportunities to enhance their financial preparation for retirement.

Entering your 50s and behind in your retirement planning goals? Don't fret. You've still got time to get your financial plan back on track.

There are many steps that older investors can take to better prepare themselves financially for retirement. Here are six tips that may help you make the most of your final working years.

  1. Catch up. If you have access to a 401(k) or other workplace-sponsored plan at work, make the $5,500 catch-up contribution that is available to participants aged 50 and older. Note that you are first required to contribute the annual employee maximum, $17,500 for 2013, before making the catch-up contribution.
  2. Fund an IRA. Investors aged 50 and older can contribute $6,500 annually (the $5,500 annual contribution plus an additional catch-up contribution of $1,000). An investor in his or her 50s who contributes the maximum amounts to both a 401(k) and an IRA could accelerate retirement savings by more than $25,000 a year.
  3. Consider dividends. If you do not have access to a workplace-sponsored retirement plan, or you already contribute the maximum to your qualified retirement accounts, consider stocks that offer dividend reinvestment.1 Reinvesting your dividends can help to grow your account balance over time.
  4. Make little cuts. Consider how you can trim expenses while continuing to enjoy life. Some suggestions for quick savings: eliminate or reduce premium cable channels that you do not watch, memberships that you do not use regularly, and frequent splurges on dining out or coffee runs. An extra $100 a month saved today could make a big difference down the road.
  5. Review strategies for postponing retirement. You may be able to learn new skills that could increase your marketability to potential employers. Even a part-time job could reduce your need to deplete retirement assets.
  6. Don't give up. Many preretirees falsely believe that there is nothing they can do to build retirement assets and, as a result, do nothing. Remember that you control how much you invest and, in many areas, how much you spend. Make a plan -- and stick with it.

1Investing in stocks involves risk, including loss of principal.


Michelle Maccio is a CERTIFIED FINANCIAL PLANNER™ and is the founder of  Maccio Financial Group. For more information, visit the company website at www.macciofg.com, or call (860) 426-1407.

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REVMAN February 23, 2013 at 04:23 PM
Fund an IRA--If you can afford it convert it to a Roth IRA and when you draw from your Roth it is tax free.
Haggis O'Keafe February 23, 2013 at 05:32 PM
Dividends rock. QE3 blew out the REITs but there's lots of return this year in Equity Investments such as BKCC and TWO.
Harry February 23, 2013 at 06:39 PM
Taxes UP, gas UP, food costs UP, clothing costs UP, Healthcare costs UP Trim expenses? Who you kidding? So what do you tell those over 50 that lost there jobs and will never be employed again?
Richard Poulton February 23, 2013 at 08:12 PM
You are correct. If one can afford it, and by the way you don't need tons of cash to start, dividents are the way to go. Just read and understand the difference between Ordinary and Qualified Dividents. Big diference in taxes. OD's are taxed. QD's are not as long as your stay under the 25% income bracket. Over 60 yrs in age think just short term buys. Have some fun. I wish I did this many many years back. Great paying divident stocks out there. Some as high as 18%. I try to look for low cost but hih yielding stocks. Play the x-date, get in - get out, buy again. Takes a little practice time.
Jim G. February 23, 2013 at 08:55 PM
I'd ask them how much "disposable income" they spent in their salaried years.
Scott Wheeler February 24, 2013 at 03:29 AM
If they are in their 50s they should have been saving for retirement for around 25-28 years and have a nice ballance working. Costs are only up if you continue to pay those costs, I am speaking of luxury items and not gas, heat, electric, etc. Dont dine out as much, buy less fancy cloths, make your "to go" coffee, bulk buy food and learn new receipes, etc. My son looks at big houses and says wow they have a lot of money and I always tell him how do you know what they have in the bank? Max that company 401 and just do not touch it ever, forget it is there but for semi-annual checks on the funds and their performance.
Bob Fawkes February 24, 2013 at 04:53 AM
What government hasn't tried to capitalize its broke central bank and treasury by "benevolently" taking all retirement funds under its wing? Argentina has done it how many times? Giving your money to Fidelity to be part of the latest pump'n'dump scam shouldn't be confused with "saving for retirement." Having to quit your job to get your money.  Wrap your head around that one....
Bob Fawkes February 24, 2013 at 01:05 PM
Woody February 24, 2013 at 01:41 PM
I guess I should spend it all now!
Richard Poulton February 24, 2013 at 02:16 PM
How many of us can remember when we were just getting that first job and our parents said "save ten percent". If you only made a dollar, save ten cents. Made a hundred, save 10 dollars, so on and so forth. But did any of us do that, I would say the answer is no. Just imagine if we listen to them back then and did that all the way into adult-hood. But we didn't, or at least I didn't.
Woody February 24, 2013 at 05:15 PM
I found this------>http://www.factcheck.org/2012/12/no-government-401k-takeover/
REVMAN February 24, 2013 at 05:16 PM
I'd ask them who they voted for in this last election and WHY.
REVMAN February 24, 2013 at 05:28 PM
Richard --Most kids don't listen to their parents because they feel the're stupid and then watch them retire and take trips around the world and they still don't get it.Some kids told me when their parents kick the bucket(Yes in those words) it will all be theirs,WHAT'S LEFT.My advice is save(don't buy StarBucks)save some more(don't spend $200 on cell phones) and save until it hurts.Get a ROTH because I find paying taxes both state & federal on my Reg.401k, savings,mutural funds and Social Security a hassle and down right annoying.But makes my accountant happy.
Charles February 25, 2013 at 07:28 PM
very funny comment. My first boss when I was 22 out of college told me to save 10% of my salary every paycheck. Started then and now I am 52 and I have nearly $675,000 in my retirement account.
Richard Poulton February 25, 2013 at 08:15 PM
Revman, when we stop seeing parents buying their kids sneakers costing $150.00 the maybe the "kids' will start learning that mommy & daddy do not have a money tree. Remember that phrase? There is a very simple 2 letter word that my parents used all the time - that was NO. Then they should tell them if you want it go earn and save your own money. Hopefully that line of thinking will be continued into adult-hood. Though I doubt it. Charles' comment above says it all as well. Way to go Charles, just hope its in a nice low tax plan?
Richard Poulton February 26, 2013 at 04:11 PM
FYI to those that play in the stock market a little, those that do your own buying & selling on line. If this sequester takes place in a few days the market just may react to the negative, driving down the shares of some companies, puttng them in a better price range to buy at a low. The market will correct itself and start returning to the up-side. Just saying.
REVMAN March 02, 2013 at 03:52 PM
I would be leary of stocks that haven't in existance for at least 10 years.2 stocks don't make a portfolio because you would need thousands of shares to make good money.
Jim G. March 02, 2013 at 05:51 PM
@REVMAN, if you only hold stocks that have made their initial run and found a stable point, you're unlikely to ever see much return from them.


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