It’s Never Too Late: Essential Steps for Starting Retirement Planning in Your 50s or 60s
Many people delay planning for retirement due to life’s various demands—raising children, career, or managing other financial and family responsibilities. However, if you're in your 50s or 60s and have no plans in place for your retirement, it’s important to remember: It’s never too late. Here are some essential steps to kickstart your retirement planning when you're starting late.
1. Assess Your Current Financial Situation and Skillset
First step is to take an honest look at your financial position. Make a list of all your assets (savings, investments, and properties), liabilities (debts like loans or mortgages), and expected sources of income (like pensions or savings). By understanding where you stand financially, you can identify gaps and set realistic goals for retirement.
Second step is to analyse your skill set, the gaps that need to be filled and the new set of skills that needs to be acquired
Action Points:
*Calculate your net worth (assets minus liabilities).
*Evaluate current savings and spending habits.
*Determine your future income sources from savings, investments or pensions
*What new skill do you need to acquire to earn income in retirement like social media / online marketing, Artificial intelligence etc
2. Set Realistic Retirement Goals
it's time to set clear, realistic retirement goals. Ask yourself key questions like: At what age do I want to retire? How much will I need annually during retirement? Would I be open to part-time or remote work during retirement? Your answers will guide how aggressively you need to save and invest.
Action Points:
* Decide on a retirement age and estimate how many years you’ll need to support yourself after retiring.
* Set specific retirement savings goals, taking into account lifestyle preferences. inflation and potential healthcare costs. We usually counsel a retirement financial goal of twenty five times of your expected annual retirement expenses
3. Take Advantage of Catch-Up Contributions and
You are eligible to contribute more to tax-advantaged retirement accounts, through voluntary contributions. This is one of the most powerful tools available for late starters, allowing you to save more than the regular contribution limits
Action Points:
*Maximize contributions to your Retirement Savings Account
*Open an investment account and start investing in the stock market
4. Invest Wisely for Growth and Diversify
With less time until retirement, your investment strategy should balance growth and security. While it may be tempting to go ultra-conservative with your investments, it's crucial to include growth-oriented assets like stocks in your portfolio to give your savings the opportunity to grow. Consider a diversified portfolio with a mix of stocks, bonds, treasury bills and other assets that align with your risk tolerance.
Action Points:
*Diversify your investments across asset classes like stocks, bonds, and mutual funds to manage risk and potential returns.
*Consult a financial advisor to review your investment strategy and tailor it to your retirement timeline.
5. Pay Off High-Interest Debt
Carrying debt into retirement can erode your financial security, As part of your retirement planning, prioritize paying off debt as quickly as possible.
Action Points:
*Develop a debt repayment plan, prioritizing high-interest loans
6. Consider Delaying Retirement or Working Part-Time
Pushing back retirement by two to three years can make a significant difference, allowing you to save more and giving your investments more time to grow. Additionally, working part-time in retirement can supplement your income and ease the pressure on your savings.
Action Points:
*Explore the option of extending your career or transitioning to part-time or remote work during retirement
7. ReFirement not reTirement – What will you do in retirement
You need to reFIRE into a productive activity and not reTIRE into inactivity. Start a retirement business, volunteer your time at charitable locations like motherless babies home, teach for free at a public school, set up a foundation, take up another employment, research remote working opportunities, Go back to school, acquire new skills, do an apprenticeship etc
Action Points:
*Write a list of businesses / side hustle you are interested in
*Where can you learn more about the business? Apprenticeship?
*What new skill set do you need to acquire for your next level
8. Plan for Healthcare Costs and work towards staying healthy for Life
Healthcare is one of the biggest expenses retirees face, and it’s important to plan for these costs. Research your options for Medical care, insurance for life and critical illness. A number of Old Students Association are organizing this for their members
Action Points:
*Researching Medical and health insurance options
*Adopt a healthy lifestyle – what you eat and drink, physical exercise, become a peace maker and bridge builder
*Make peace with your Maker
8. Downsize and Adjust Your Lifestyle
If you’re behind on retirement savings, one way to close the gap is by reducing your expenses. Downsizing your home, cutting down on discretionary spending, and simplifying your lifestyle can free up more money to put toward retirement. This may involve selling a larger home in favor of a smaller one, moving to a lower-cost area etc
Action Points:
*Evaluate your current housing situation and consider whether downsizing is a practical option or redesigning the house for rental income space
*Reduce unnecessary expenses like aso-ebi and redirect those savings toward retirement accounts.
9. Building Retirement Wealth
We need to build sustainable wealth while planning for a peaceful, flourishing, healthy retirement. There are five types of wealth that we need to build
TIME wealth: do you have enough time to live the life of your dreams?
FINANCIAL wealth: Do you have enough money to sponsor the life of your dreams?
PHYSICAL wealth: Good health and having energy and strength to do the things you dream of?
SOCIAL wealth: Do you have enough people in your circle of influence who can help you achieve your dreams, support your vision, raise a strong voice for you any-time your name, business or dream is mentioned?
Generational wealth – A good man leaves an inheritance to his grandchildren. (prov13:22) It is a blessing to leave a good legacy for the next generation combining the other four types of wealth
Action Points:
*Your spouse is not a financial plan, Your parents are not your emergency fund, Your children are not your retirement fund – Build Your Own Wealth
10. Your Estate Plan
Have you written your Legal Will? Is your Digital Will ready? Do you have a trust document in place and a Power of Attorney for a loved one to take action on your behalf if you have medical challenges. Work on these documents
Action Points:
Consult your lawyer to help you set up your WILL and estate documents
Conclusion
Starting retirement planning in your 50s or 60s may feel daunting, but it is entirely possible to build a solid financial foundation if you take decisive action. With focus and determination, you can still create the retirement you’ve always envisioned.
Article by Bibi Apampa "The Retirement Queen" a renowned financial expert, author, speaker and recognised Global thought leader on Retirement Wealth and Financial Empowerment. She has a passion for helping individuals build wealth, achieve financial independence, secure multiple income streams, and retire confidently Access a free webinar on Rich Retirement Planning at https://BibiApampa.info