Retirement Planning in Your 50s: Are You on Track?

In your early 50s, retirement starts to feel more tangible. You’ve likely contributed to your 401(k), built up a savings cushion, and perhaps even met with a financial advisor a few times. But as the years to retirement get shorter, you might wonder: Am I really on track?

It’s common to reach this stage and realize there are still some big questions that need answers:

- When should I start drawing Social Security?

- How can I cover unexpected medical expenses?

- Will I have enough money to last through retirement?

- Is my investment strategy positioned for long-term success?

Even if you’ve taken steps toward financial security, your 50s are a critical time to refine your approach. A more focused retirement plan can give you the clarity and confidence to navigate this next chapter.

Taking Stock: Assessing Your Retirement Readiness

We believe the first step in ensuring you’re on track for retirement is taking a full inventory of your financial situation. It’s not just about what you’ve saved, but how well your savings align with the lifestyle you want to enjoy in retirement.

Start by looking at your retirement accounts—401(k)s, IRAs, and any personal savings. Knowing your balances is important, but you also need to project how these assets will generate income in retirement. Will they provide enough to sustain you for 20 to 30 years?

Next, estimate your future expenses. Will you be maintaining your current lifestyle or making changes, like downsizing your home or increasing your travel budget? You’ll also need to consider unexpected costs, like healthcare or long-term care, which can significantly impact your financial plans. Understanding these future cash flow needs will help you determine if your current savings are enough.

Finally, think about your income sources beyond savings. Social Security, pensions, or rental income can all play a role in funding your retirement. When will you begin drawing Social Security? Should you delay benefits to maximize them, or start earlier to supplement your savings? Taking a close look at your income streams will provide a clearer picture of how your financial future might unfold.

Maximizing Your Investment Strategy for Retirement

As you enter your 50s, your investment strategy may need to evolve from being purely growth-focused to income-generating to also include capital preservation. You’re not just saving anymore—you’re preparing your portfolio to provide sustainable income during your retirement years.

If your portfolio is heavily weighted toward stocks, it might be time to adjust your asset allocation. While growth is still important, especially if you have several years before retiring, balancing growth with capital preservation becomes critical. A more conservative mix that includes diversified bond and equity holdings can provide both stability and consistent income. This income can then complement Social Security and/or pension payments, reducing the risk of outliving your savings.

By rebalancing your portfolio and adjusting your investment strategy, you can protect what you’ve built while still allowing for some growth. If you’re wondering how to position your investments to provide reliable income, Wealthquest’s advisors can help you navigate these decisions.

Tax Planning: Keeping More of What You Earn

One of the biggest opportunities to make your money last longer in retirement is through tax planning. In your 50s, strategic tax decisions can make a significant difference in how much of your savings you get to keep.

Start by taking advantage of catch-up contributions. Once you reach 50, you can contribute extra to your retirement accounts, like 401(k)s and IRAs. These contributions are not only tax-deferred, but they also allow you to boost your retirement savings in the critical years before retirement.

When it’s time to start withdrawing funds, a well-planned strategy can help reduce your tax burden. By withdrawing from taxable accounts first, followed by tax-deferred accounts, you can potentially minimize the taxes you’ll owe each year. And if you leave Roth IRA withdrawals for later, you allow the account to remain invested for more tax-free growth over time. This gives you greater flexibility to take tax-free Roth distributions in the future and better manage your overall tax liability.

Another consideration is healthcare—a major expense in retirement. If you’re still working and have access to a Health Savings Account (HSA), it can be a great tool for tax-free savings dedicated to medical expenses. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified healthcare costs are also tax-free. Funding an HSA can help you prepare for future medical costs while enjoying significant tax benefits.

With the right tax strategy, you can extend the life of your retirement savings. Wealthquest’s tax advisors can help you plan the most tax-efficient way to withdraw your funds, allowing you to keep more of what you’ve worked so hard to save.

Bringing It All Together: Our All Under One Roof Approach

Retirement planning doesn’t stop at investments and savings. As you prepare for this major life transition, you’ll likely need to bring together multiple financial elements to ensure you’re truly ready. Investment management, tax planning, and even estate planning should all work together seamlessly to support your retirement goals.

This is where Wealthquest’s “all under one roof” approach can make a difference. By coordinating multiple aspects of your financial plan—investments, taxes, and estate considerations—you can gain the confidence that every piece of your retirement strategy is aligned.

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Wealthquest’s team works collaboratively to address the questions that matter most:

- Are your investments structured to provide the income you need throughout retirement?

- Have you optimized your tax strategy to keep more of your money?

- Is your estate plan in place to ensure your legacy is protected?

By addressing all of these components under one team, you can gain a comprehensive, integrated plan that provides clarity and peace of mind. Schedule time with us today to start building a secure retirement strategy.