You’re in your 50s, heading down the stretch toward retirement. The kids are probably gone or on their way out the door, and it’s time to focus on you. The next 10 years are pivotal for your retirement planning and reaching your goals.
But what should you be doing at this stage? Part of looking toward the future is assessing where you are in the present. Taking a realistic view of your circumstances and where you want to be in 10 years is key to having a financially sound retirement.
Determine What You’ll Need
Whether you’ve been putting money away all along or are just starting to do so, you’re going to need a plan. Envision what kind of retirement you want. Will you work part time, travel, or volunteer? Or maybe you just want to relax on the beach with a book. Your future lifestyle determines what you need in finances.You'll also need to know where you’re going to live. If you plan on selling your large home and moving to a smaller home in a city with a low cost of living, your goals may be different than those if you stay where you are now. Sit down with your spouse and map where you want to be when you both retire.
Determine Your Income
Estimate your predictable income from Social Security, and if you have it, employer-sponsored pension plans. You’ll also receive income from retirement funds like savings and investment accounts. If you plan on working part time, estimate what you expect to earn.You’ll also need to determine when you will take Social Security benefits. The earlier you take it, the lower the benefit. Factor that amount into your overall income.
Budget Your Retirement
Crunch the numbers; now is the time to calculate future expenses. The economy changes, but having a rough budget will help determine what you’re going to need to maintain the lifestyle you want.Research the cost of living in your future retirement location. Organize your expenses into “needs” and “wants.” You'll want to prioritize what wants are important to you. Do you want to have the funds to travel, or is having a nice house more important?
Once you’ve determined your needs and wants, start managing your finances.
Take Advantage of Catch-Up Contributions and Retirement Accounts
Increase your retirement contributions up to the maximum allowed. That goes for 401(k) plans, individual retirement accounts (IRAs), or other types of retirement accounts. If you’re over 50, depending on the terms of your retirement plan, you may be able to make an additional catch-up contribution.
According to the Internal Revenue Service, the SECURE 2.0 Act (SECURE refers to Setting Every Community Up for Retirement Enhancement), increased annual contributions in 401(k) plans from $23,000 to $23,500 effective 2025. The additional annual catch-up contribution for 401(k) plans remained at $75,000. But that means you can potentially contribute $31,000 a year.
The good news for those between 60 and 63 is that the catch-up amount went from $7,500 to $11,250. That means a total of $34,750 can be contributed annually for those three years.
Retirement Account Consolidation
Consider consolidating your retirement accounts if you have several. Combine IRAs of the same type with one institution. This will simplify your investments and make it easier to see what you have.Search for Forgotten 401(k) Plans
If you’ve changed jobs several times throughout your career, look for old 401(k) accounts that you might have forgotten. You may have some with former employers.This is a common occurrence. In 2023, there were approximately 29.2 million abandoned 401(k)s holding an average balance of $56,616, according to Capitalize, an organization that works with retirement plans. So, go back over your former jobs and contact their HR departments to determine if you’ve forgotten one.
If you know of them, review them and learn what distribution choices you can make when changing jobs. Talk to a tax professional to learn the pros and cons of moving the money or leaving it.
Pay Down Debt
Debt can drain your retirement savings. It’s prudent to eliminate as much debt as possible before leaving the workforce.Pay down the high-interest debt first. Credit cards and personal loans can weigh like anchors on your financial future. Consider using the snowball method, paying the lowest balance debt first, or the avalanche method, paying the highest interest rate debt first, to eliminate debt. The sooner you are debt-free, the more money you can allocate to retirement accounts.
Your mortgage is technically a debt, but it usually comes with a low interest rate. You may want to tackle high-interest debt first, then turn your sights on the mortgage payoff.
Plan for Future Health Costs
If you’re planning to retire before 65, you won’t be eligible for Medicare and will need to budget for an insurance premium.Consider protecting your retirement funds by purchasing long-term care insurance. This will help with expenses like home health aides. Do it while you’re young, and your premiums will be lower. If you wait too long, you may be rejected by insurers.
Final Stretch of Retirement Planning Critical
If you’re 10 years out from retirement, assess where you are financially and start planning. Calculate your income and anticipate future expenses. Take advantage of catch-up contributions into retirement accounts.And finally, make it a point to pay down high-interest debt and plan for health care costs.
The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
