What are Biggest Mistakes Folks make after 50?

POSTED ON: June 22, 2021
CATEGORY: Estate Planning
mistakes after 50
Reaching age 50 is a milestone that most of us celebrate. Still, after you’ve blown out the candles and bid farewell to your guests, you may have a headache from too much champagne, but otherwise feel the same as before.

It’s time to reassess and make sure that your financial plan is in order. If you wait until later, you may make serious mistakes that will threaten your future financial security. Jerry Taylor of Jerry Taylor Law in Fairhope, Alabama gives us 10 mistakes that 50-year-olds make that may have serious consequences in the future:

  1. Expecting to work past retirement age. Data shows that people retire sooner than planned, often due to layoffs, health issues or family matters. If you lose your job in your 60s, it may be incredibly tough to find a new one, especially with the same pay and benefits. Plan for an earlier retirement date, and if you work well into your 60s, it should be because you want to, and not because you must.
  2. Taking too much or too little risk. Some people realize that time is running out, and they may do one of two things: take in too much risk, frequently in the form of speculative investments or they sell everything and move into cash, CDs, or fixed annuities, which can deprive them of decades of growth. Too much risk might mean huge losses, when they can least afford them. Instead, create an investment strategy based on your goals, aspirations and concerns.
  3. Missing the 50-plus catch-up provisions. As a 50-year-old, you can catch up in your savings so do not make that mistake. For 2021, the IRS is allowing individuals to contribute an additional $1,000 to an IRA in addition to the standard $6,000 limit. Self-employed people 50 and older with a SIMPLE IRA can add $3,000 to the $13,500 limit. If you have an employer-sponsored 401(k), you can max out your contributions by adding $6,500 over the $19,500 limit. While you are still employed, you can start a Roth IRA with a 2021 contribution limit of $7,000 for those 50-plus.
  4. Too much credit card debt. Paying down debt is critical, and you should work toward having no debt, except your mortgage. Once other debts are paid off, and you are funding your retirement, then attack your mortgage.
  5. Adding college debt. Parents sometimes make the mistake after 50 of taking on too much debt to fund their kids’ schooling because they did not save enough in their 529 plans. Some take out home equity loans or other debts that they may be unable to pay off before retirement. These put a tremendous drag on monthly cash flow, especially for those on a fixed budget. Instead, make your children take loans in their names and help them with payments as much as you can or wish to. Do not jeopardize your own financial security.
  6. Overlooking health maintenance. Spending time, energy and money in your health now will help to reduce health-related expenses later. You will also enjoy the journey more because you feel better. Watch your weight, exercise and eat a healthy diet.
  7. Neglecting life insurance. Many healthy 50-year-olds may not think much about insurance, but at 60, buying a long-term care policy may be difficult. Health can worsen from 50 to 60, making a policy harder and more expensive to obtain. Life insurance is also important because you do not want your family to experience emotional and financial stress in the event of your untimely and premature death.
  8. Living the same lifestyle after a divorce. Divorce is the number one risk to retirement. Dividing assets and assuming individual expenses can be financially devastating. Envision your financial plan as a single person and look at the way in which divorce will impact your long-term goals. Keeping your past lifestyle and budget is a common mistake. If you need to downsize post-divorce, do it sooner rather than later.
  9. Failing to update important documents. If you have an estate plan, do not make the mistake after age 50 of failing to make certain it is current. If you do not, contact Jerry Taylor Law and get one. Life changes, so review your will, trusts, health care proxies, living wills, powers of attorney and beneficiary designations.
  10. Letting the market frighten you. Do not make the mistake of trying to time the market. You should have amassed substantial assets, so do not be distraught if the market plunges. Filter out the noise and stick with your strategy.

For more information on protecting your family through the transitions of life, contact Jerry Taylor of Jerry Taylor Law in Fairhope, Alabama.

 

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