Finances in Your 50s

On past blog posts I wrote about how your 20s and 30s are mostly about debt - gaining debt and trying to control debt.  In your 40s you are transitioning away from gaining debt to paying down debt and hopefully starting to build up assets that will support you in retirement.

In your 50s you should be completing the transition away from debt and focusing on preparing for retirement.   You should be making some extra payments on your mortgage, paying off credit cards completely whenever they are used, and have all vehicle loans at a minimum. 

As the debt decreases, the ability to add more to your retirement fund grows.  Throughout your 50s you will most likely be at the height of your earning potential, which will also allow you to add more of your income to your investment portfolio.  Usually, if you are in a relationship, both people are working, which provides a greater opportunity to increase your retirement fund holdings.


Your lifestyle is changing as well.  Without young kids in the house you can start to purchase higher quality items without the fears of someone breaking them.  This will range from dishes to furniture and even vehicles.  As children leave home you can get a vehicle that should last for several years as its usage decreases quite a bit.

Your children will present some interesting financial challenges in your 50s.  Most of them are probably leaving home, but about 1/3 of them will return to live at home for 6 months or more, sometimes with their own family.  Your children will also struggle to pay for school and possibly a first home.  Your, and their, ability to pay for these things will depend on the financial planning and budgeting that you did together while they were growing up.

As you are approaching retirement you will also need to think of how you may want to take care of your loved ones after you have passed on and what you want to happen if you are not able to make decisions for yourself.  Both of these involve some estate planning and creating a will and a living will.  None of these topics are fun to talk about, but by preparing for such incidents beforehand you are saving your loved ones a lot of grief.  It's your money and your life, you should take the time to make sure things happen the way you want to before you can't make those decisions yourself.

Lastly, take care of yourself physically so that as the time comes you can enjoy a lower stress life.  Grandchildren may soon arrive, retirement isn't very far away.  Make sure you are in good health so you enjoy all those great things that will soon happen.  Consider them to be the harvest of the crops you have planted all life.  Jerry