Financial Management in Your 50s

For most, their 50s is a time for retirement planning. It’s never too early to consider your retirement options, even if you won’t be ready to retire for a while. However, there are plenty of other financial concerns to keep on top of, too.

By Telus Health

Plan early for retirement

Leaving retirement planning too late is a common pitfall, so your 50s is the ideal time to start making some more concrete plans. Consider:

  • where you want to live
  • what your retirement goals might be
  • whether you will continue to work part-time after you retire
  • whether you would like to downsize by moving to a smaller home
  • how much money you think you’ll need to have the retirement you want
  • how close you are to paying off your debt

If you review your budget, current RRSP balance, and assets and find that you’re falling short of your projected retirement needs, it’s not too late to improve your projected retirement income. Consider speaking to a financial adviser about ways to boost your contributions. You may also want to look for ways you can reduce your expenditure and increase your income.

Avoid taking out or giving loans you can’t afford

Many Canadians in their 50s want to help their kids buy their first home or make other financial commitments, such as studying overseas. However, experts warn that retiring without debt should be your number 1 priority. Loaning your kids more than you can afford, or taking out a loan to help them out may mean you’re left struggling in retirement.

Take care of your health

Besides the obvious reasons to improve your health, taking care of yourself has many financial benefits too. Better health means you could opt for a basic private health package (if you choose private health care), and won’t need to pay for things like physiotherapy or medication. It can give you more options when it comes to the length of your career, which can help you earning money longer. Maintaining your good health by not smoking or drinking to excess will also give you more disposable income in the short-term.

Be prepared for unexpected events

While it’s no fun to think about injury, divorce, or the death of a spouse, these are some of the biggest threats to financial security in your 50s. However, even if none of these things happen, you might need to suddenly help out a family member, recover from a flood or fire, or take time off work for a short-term illness. Always make sure you maintain an emergency fund so that if any unexpected expense arises, you’ll be able to take care of it.

If you do have a severe financial hit, like a job loss or divorce, it’s important to speak to a professional to make a plan for rebuilding your finances.

Make your will

If you haven’t already, now’s the time to make an appointment with a lawyer to create your will so that your assets can be distributed in the way that you decide. This is also a good opportunity to make sure your documents are filed correctly and to give instructions about your funeral wishes. Think about your downsizing options

While plenty of people in their 50s still have teenagers and young adults at home, it isn’t too early to start thinking about downsizing your home. That may mean moving to a smaller place to reduce the cost of upkeep or to moving somewhere you’d like to spend your retirement. (If moving isn’t part of your plan, you may want to focus on paying off your mortgage instead.) Speak to a financial adviser to find out the best course of action for your unique circumstances, mortgage, obligations, and plans.

Make sure you’ve got the right insurance plans

Between medical insurance, life insurance, disability insurance, income insurance, home and contents, and car insurance, there’s a lot to juggle and it can be difficult to pick the right providers and plans for you. It’s a good idea to talk financial adviser about the best combination for you and your circumstances.

Plan for elder care

At this stage, many people become carers for aging relatives. Now is the time to have conversations about plans for your loved ones’ care and whether you will need to make a financial or time commitment.

Some of the financial planning and decisions you’ll make in your 50s can be emotionally difficult. If you are struggling with any anxiety or worry around them, call your assistance program to speak with a counsellor who can help.

Melanie Hardie, MA, CFP®, AFC® is a Certified Financial Planner, an Accredited Financial Counsellor, and has a Master’s degree in psychology.