Written by: Andy Bartosch
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This is part two of a two-part series highlighting wealth + health considerations from decade to decade. For tips to follow in your 30s and 40s, go here.
As we age, some considerations for our wealth + health become more important than others. We hope you’ll find this wealth + health article useful in supporting your bank account and your body during each decade from 50s to 60s and beyond.
Health + Wealth in your 50s
It’s most likely your goal to retire at some point during your 60s. It might be helpful to look at the wealth + health choices in your 50s as essential preparation for your ideal retirement when you reach decade six.
Share the wealth planning.
If you’re married with kids, you and your spouse have probably been busy bees these last ten years. In order to make it all happen you’ve likely divided up the work. One of you cooks dinner and helps with homework, while the other does the laundry and packs the lunches. But if only one of you has been doing the financial planning until now, it’s probably a good time for both of you to get on board.
Why? Financial planning can be tricky. You’re going to need all the help you can get to make the right choices for your family. It also affects both parties. You need to make sure you and your spouse are on the same page about the choices it might take to prepare for retirement.
Help the survivor
Though it’s no picnic to think about, more than likely, one of you will outlive the other. And if that person thinks an IRA is some sort of baseball statistic, it could lead to poor financial decisions that open your family up to financial risk.
Gray Divorce
In another no-picnic scenario, divorce among older populations has been on the rise. Both spouses could use a certain amount of financial acuity and knowledge about their situation to avoid financial harm in a divorce settlement.
Get your mental workout.
Entering your fifth decade often means more noticeable signs of aging and a higher risk for disease including Alzheimer’s and other dementias. These scenarios can force seniors into expensive long-term care and have an impact of the emotional health of a family. There is no cure for Alzheimer’s, but there are things you can do to help prevent cognitive decline and cut your risk.
Check out these 7 Things You Can Do to Help Prevent Dementia.
Watch your waist and your budget.
As you age, your metabolism slows and your body starts naturally replacing muscle with fat. Don’t worry too much. This change is essentially par for the biological course. But too much weight gain can lead to obesity, raising your risk for diabetes, cancer, heart disease, and poor mental health. Not exactly the picture of a happy retirement. With years of hard work saving and making solid financial moves, it makes sense to pay serious attention to your weight during your 50s – if at least out of duty to your wallet.
Get strong
The experts over at Healthline.com recommend continuing to stay active throughout your 50s and beyond, as well as adding muscle-building exercise (such as resistance training or high intensity interval training) to your routine.
Experiment with a new budget
And while you may be earning more than ever at work, depending on your situation, it’s not a bad idea to start being a little more fastidious with where and how you spend your money. To help ensure a comfortable retirement – one where you spend money on the things that make you happiest – you can start learning the habit of budgeting in the areas in your life that aren’t as important to you. The classic example would be: Opting to make coffee at home instead of mindlessly grabbing that $4 cup on the way to work. These kinds of trade-offs are the oil that keeps the retirement machine running. If you start good budget habits now, it might help reduce the sticker shock of retirement on a fixed income later.
Grow some savings
One activity that could address the issues of both weight and budget is gardening. One study found community gardeners report lower BMIs and concluded that “community gardening may offer an approach to offset age-related weight gain.” And who knows, you might even be able to use this list of cost-effective vegetables and garden-maximizing tips to save some money on your next grocery bill.
Catch up and consolidate.
If you chose to divert some of your retirement money towards saving for your kids’ college tuition, or other expenses and debts, your 50s are a chance to catch back up. The government allows, in 2018, anyone over the age of 50 to contribute up to $6,000 of extra cash toward their retirement.
And if you or your spouse changed jobs, or switched retirement accounts along the way, your 50s are a good time to consolidate everything into one easy-to-manage place. Doing this can limit your fees and paperwork. It also makes it easier to update your beneficiaries.
Wealth + health in your 60s
Ah! Your 60s. Hopefully, retirement isn’t just on the horizon, it’s pretty much right outside your window. Now’s the time to decide on Social Security and Medicare, and work to keep up all the wealth + health habits you’ve been practicing over the years.
Whether to take Social Security early or not.
One of your biggest financial decisions will come early on in the decade: Whether to take Social Security benefits early (at 62) or wait to get them on time (67 for those born in 1960 or later). Some people choose to take them early. Either out of monetary necessity or due to health concerns for the future. But taking your benefits early comes with a hefty penalty – a 25% deduction in benefits every month. On the flip side, if you wait, you get income increasing credits of 8% every year until 70.
This important decision should be made along with your spouse and with the help of a trusted financial planner. For a simple, but comprehensive look at Social Security-maximizing strategies check out this Knowledge Place article.
Medicare
As with Social Security benefits, there’s a lot of confusing and difficult terrain in navigating Medicare. You should work with your spouse and trusted financial professional to make your Medicare decisions. You can apply for Medicare up to three months before you turn 65. The enrollment period lasts seven months. The three months before turning 65, the month you turn 65, and the three months after. It’s important to pay close attention to the government’s enrollment periods and rules in order to avoid a gap in your coverage, a late enrollment fee, or a penalty. For example, if you aren’t enrolled in an employer sponsored health plan, and you don’t sign up for Medicare Part B, you could be penalized.
It’s also important to understand that Medicare does not cover long-term care should you need to live in a long-term care facility. According to the U.S. Department of Health and Human Services, 70% of people who reach age 65 can expect to use some form of long-term care in their lives. You may want to talk with your spouse and financial professional about long-term care insurance to prepare for that possibility.
Find out what you can get covered by Medicare Parts A and B.
Keep on keeping on.
You’ve spent your whole life working hard – in your career, at home, in your relationships, and on your physical, mental, and financial health. Of course, everyone should have the chance to take it easy as they reach their 60s and retirement, but don’t forget to keep an eye towards the future. According to the Social Security Administration, on average, a man and woman who reach age 65 today can expect to live to 84.3 and 86.6 years, respectively. And one out of four 65 year-olds today will live past the age of 90. Which begs the question: Is 60 the new 30?
Things to Consider
- Use this article to inform your wealth + health decisions in different stages of life.
- Don’t forget to consult with trusted professionals about your wealth + health.
- Invest in lifelong habits that contribute to the well-being of your body and your bank account.
Neither Transamerica nor its agents or representatives may provide tax, investment or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.
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