Planning to retire can be stressful when you consider all of your expenses on a fixed income.
But you may be surprised that you can plan for your retirement now to make your future easier to handle, and you could even retire early with the right planning.
So what can you do before you turn 50 to ensure you’re on the right track? Here are a few critical moves to get you started.
Eliminate your late tax debt
Each year, the IRS forgives millions in unpaid taxes. If you have more than $10,000 in tax debt, or have 3+ years of unfiled taxes, you could get forgiveness too. You might be eligible to lower the amount you owe, or eliminate your tax debt completely.
Easy Tax Relief could help you lower or get out of your tax debt for good. They’re well respected in the industry and have been recognized for their ethical standards when dealing with tax debt. While most tax companies just put you on a payment plan and file your taxes for you, Easy Tax Relief talks to the IRS directly. They can help you pay off your tax debt faster while potentially reducing what you owe.
Important: Not everyone will qualify. To take advantage of this special program you must owe more than $10,000 in past-due taxes.
Fill out this form to get started
Create an estimated budget
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The best place to start when preparing for your retirement is to create an estimated budget for how much you expect to spend when you’re retired. You should include everyday costs like groceries and utilities and one-time expenses like vacations.
It’s also a good idea to sit down with your current budget and look at it as a way to bump up your retirement savings.
You may find the extra cash you can put toward retirement savings or new ways to keep some cash in your pocket for retirement instead of throwing money away.
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Make sure you have an emergency fund
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An emergency fund is an important piece of your budget to cover any surprising cost such as health issues, car trouble, or a major home repair.
But an emergency fund can also help you prepare for retirement. If you have an emergency, you can dip into the fund to cover costs instead of taking money out of a retirement fund or using debt.
Downsize your debt
![Cheerful senior woman holding papers talking on phone about documents while in the background her husband preparing dinner at kitchen.](https://cdn.financebuzz.com/filters:quality(75)/images/2023/06/18/senior-woman-talking-on-phone-and-holding-papers.jpeg)
You don’t want to retire with debt on your balance sheet or have to worry about paying down debt with a fixed retirement income.
Coming up with a plan to pay down your debt is a great thing to do before you turn 50 years old. It can help you get that debt off your retirement budget and free up your cash to invest in retirement funds.
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Invest in an IRA
![Documents about Individual retirement account IRA on a desk with an opened pen,calculator and a notebook.](https://cdn.financebuzz.com/filters:quality(75)/images/2023/06/18/documents-about-individual-retirement-account-ira-on-a-desk.jpeg)
You may have a retirement account through your employer such as a 401(k) and that can be a great asset for your retirement plans when you're trying to grow your wealth.
But you also might want to invest in an IRA, which is an individual retirement account not connected to your employer.
An IRA may have more options for you to invest in and you could also qualify for a Roth IRA, which has additional tax benefits.
Rebalance your portfolio
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You may have started to invest in retirement when you could take bigger risks with your investments. After all, you would have plenty of working years to make up for any losses on those risks.
But as you get closer to retirement age, you may want to rethink those risky investments in your portfolio. Instead, consider rebalancing your funds and take on less risk because you won’t be able to make up for any losses as easily when you get close to retirement.
Start researching long-term care insurance
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Another important piece of your retirement plan could be long-term care insurance, which could cover things like assisted living and nursing home care as well as other medical coverage.
You may not want to start investing in long-term care yet, but it’s good to get an idea of costs and what benefits you may want to add to your estimated budget as you plan.
Check on your Social Security benefits
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It’s a good idea to assess your estimated Social Security benefits now to help you plan for your retirement.
Check out the Social Security Administration’s website for a calculator to estimate how much you should expect in monthly Social Security payments. You should also make a my Social Security account which offers personalized tools.
And remember that delaying your Social Security payments could boost your monthly payments when you decide to start collecting your payments.
Reassess education expenses
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One expense that you may have on your balance sheet now is college for your children.
This can be a major expense and if you’re having trouble with a tight budget, you may have to choose your retirement over your kids’ education.
Remember that your children can pay off their college education over a long period while you need your retirement sooner. Pay yourself and your retirement fund first before you consider helping others.
Consider a side hustle
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You may want to take on a side hustle if you’re coming up short in your current budget to save for retirement or just want some extra cash on hand specifically for retirement purposes.
A side hustle could be a few hours a week or a few extra hours a day and can work within your current schedule to earn you some extra cash. You may even want to try a hobby or interest you plan to continue to participate in after you retire.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
You’ll also get insider info on social security, job listings, caregiving, and retirement planning. And you’ll get access to AARP’s Fraud Watch Network to help you protect your money, as well as tools to help you plan for retirement.
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
Sit down with a financial advisor
![Senior couple looking at the laptop and planning their investments with financial advisor while sitting in the study room of thier home.](https://cdn.financebuzz.com/filters:quality(75)/images/2023/06/18/senior-couple-planning-their-investments-with-financial-advisor.jpeg)
Sometimes it’s important to have an advisor with a sound footing in finance to help you see additional avenues for your retirement or give you advice on what to do with your portfolio.
Check in with a financial advisor who specializes in pre-retirement planning so you can get your budget and finances in order now. Setting your finances in place today can be a great way to be successful with your funds when you retire.
Think about working longer
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If you still have large gaps in your retirement budget, you may have to consider working longer. You could also add work years to your budget if you enjoy your career and want to continue working past the typical retirement age.
Depending on your job, you also may want to use this time as a way to pivot to a position that may not be as physically demanding if you want to still work for several years to come.
Bottom line
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Remember to keep your estimated budget updated so you can revisit it and make adjustments depending on your changing circumstances. A job loss, career change, or salary bonus could make a big difference to your estimated funds and retirement date.
It’s also a good idea to find other ways to boost your income such as a side hustle or selling items you no longer want to make some additional cash.
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