Mid-Career to Retirement: Key Financial Moves for Your 50s
By Brandy Branstetter, CFP®
Your 50s signal a major turning point in your financial journey. It’s crucial that you take proactive measures to pursue a promising financial future as you navigate the path between mid-career and retirement. By making wise financial moves, you can set yourself up for a stress-free and fulfilling retirement.
Let’s explore key steps that can help you make the most of your financial potential during your 50s.
1. Reconsider Retirement Savings: A 401(k) May Not Be Enough On Its Own
Start by considering catch-up contributions. Catch-up contributions allow people over age 50 to make extra contributions to their retirement accounts, including 401(k)s and IRAs. By leveraging catch-up contributions, you can significantly boost your retirement savings and possibly your future income.
Next, think about a Future Opportunity Fund. This is a brokerage account that allows you to save your excess savings once you have your retirement account contributions at an optimal level. You’ll be able to invest in a diversified portfolio of investments but have access to these funds sooner than your retirement accounts if you are thinking about an early retirement.
Additionally, don’t overlook the perks of health savings accounts (HSAs). HSAs can be a valuable tool for retirement planning and provide tax incentives for healthcare savings. Withdrawals for approved medical costs are tax-free, and contributions to HSAs are tax-deductible.
Lastly, it’s critical to evaluate your retirement income options, such as annuities, pensions, and Social Security. You can optimize your payouts by carefully examining your Social Security claiming strategy and comprehending the ramifications of different claim options. Also, if you have a pension, consider how it can supplement your retirement income. It is essential to know the details of your benefits to build a comprehensive plan.
2. Review and Shift Your Investment Strategy
As you move closer to retirement, it is important to take a fresh look at your investments. The strategy you used in your 30s and 40s may not be the most appropriate as you reach your 50s. You may still have the willingness to be as aggressive as you were a decade ago but you may not need to be. To reduce market volatility while still maintaining growth potential, start shifting your investments from aggressive growth to a mix of balanced or income producing investment strategies. Take into account factors like economic statistics, market trends, and your personal situation.
If your risk tolerance has changed, make the necessary adjustments to your portfolio. To make informed decisions, keep up with market trends and consider consulting a financial professional. Remember that over time, a well-diversified portfolio can optimize returns and reduce risk.
3. Estimate Retirement Expenses
Estimating your retirement costs is another crucial step in the journey to prepare your retirement finances.
You can start by analyzing your current spending habits and adjusting for potential changes in retirement. Your current spending is a strong indicator of what you’ll likely be spending in your retirement years. Consider the following:
Healthcare costs: Your retirement budget can be significantly impacted by healthcare costs. Take into account things like prescription medication costs, Medicare premiums, supplemental insurance, and possible long-term care expenses.
Housing costs: Even if your mortgage is paid off, you still need to pay property taxes, homeowners insurance, and upkeep. If you choose to downsize or move, don’t forget about potential moving costs and the cost of a new house.
Discretionary spending: This category includes expenses like entertainment, hobbies, eating out, and travel. It might surprise you, but in retirement a lot of fixed expenses will go down but your discretionary spending in retirement will more than likely go up! It’s still important to set aside money for things that make you happy and fulfilled.
4. Plan Your Legacy
As you prepare for retirement, it’s crucial to think about the legacy you want to leave; your lifestyle choices have a significant impact on your golden years. Consider pursuing an encore career, moving to a more desirable or inexpensive area, or downsizing your home. These decisions have a direct impact on your financial stability and quality of life during retirement.
Also, don’t forget about how important estate planning is. Verify that your current wishes are reflected in your will, trust, and power of attorney documents by reviewing and updating them. To make a lasting impression on future generations, think about legacy planning and charitable giving.
Ultimately, remember that retirement is a period of personal development and satisfaction. Take time well before you retire to think about your interests and passions. Talk about your plans with your partner and family to make sure everyone is on the same page regarding your legacy and your shared goals.
Making proactive plans for the future can help you build a happy and purposeful retirement.
We’re Here to Help
Whether you’re in your 50s and actively preparing for retirement, or in need of a different type of fiduciary financial planning, our team at Beyond Wealth has the knowledge and experience to guide you toward a fruitful financial future.
To schedule a meeting, call (913) 871-7980 or email brandy@beyond-wealth.com.
About Brandy
Brandy Branstetter, CFP® is Principal & Wealth Advisor at Beyond Wealth, a fiduciary financial advisory firm based in Overland Park, Kansas. Beyond Wealth is dedicated to empowering clients to make confident and meaningful financial decisions. Specializing in helping mid-career professionals and business owners navigate their work-optional lifestyle, the firm provides personalized comprehensive wealth management services to the Kansas City metro area and beyond.
Brandy’s approach is collaborative and values-driven, helping clients pursue financial independence while aligning their plans with their unique goals and aspirations. She began her financial career in 2005 and became an advisor in 2012. Throughout her journey, she noticed a disconnect in how many firms communicated with female clients, inspiring her to establish a practice focused on genuinely engaging and supporting women in their financial journeys. In 2012, she co-founded Beyond Wealth with a mission to provide clients—especially female professionals and entrepreneurs—the guidance needed to navigate their financial complexities. Together with her business partner, Andrew, Brandy developed the “Good, Better, Best” financial planning framework to deliver tailored strategies that help clients achieve meaningful progress towards their financial aspirations.
Brandy earned a BSBA in Finance from the University of Tulsa and holds the CERTIFIED FINANCIAL PLANNER® designation. Outside of work, she enjoys spending time with her husband, Jon, and their two children, Alexa and Ethan. In their downtime, they love golfing, exploring new vacation spots, and attending live events—everything from rock concerts to Broadway musicals. A dedicated sports enthusiast, Brandy especially enjoys watching Oklahoma Sooner football and cheering on the Kansas City Chiefs. With a lifelong dream of living by the beach, she’s always planning her family’s next big adventure. To learn more about Brandy, connect with her on LinkedIn.