How to Save for Retirement in Your 50s

Retirement tips from a Gold Coast financial advisor

Many individuals and couples start thinking seriously about retirement when they reach their 50s. If you don’t already have a plan in place by the time you reach this age, it’s very much time to get started.

The more action you take during this decade to secure your future nest egg, the more money you will have to enjoy in your retirement.

While personal financial advice is advantageous, there are some general tips everyone can explore and apply to minimise debt and boost their savings prior to retirement.

Focus on your mortgage

First and foremost, if you are in your 50s and still have a mortgage, now is the time to focus on paying this off. The average mortgage in Australia is around $555,000 so it’s likely that by the time you are in your 50s you will still have a few years left to pay on this debt. However, by making extra repayments now, you can reduce the amount of interest you will pay over the remaining life of the loan and be debt-free by the time you retire.

If you know you are unlikely to pay off the debt by the time you retire, you may consider downsizing. By downsizing you may be able to pay off the remaining balance of your mortgage, and if there are any surplus funds use them to top up your super balance. Right now in Australia, if you sell a family home that is your primary residence, you have the potential to contribute up to $300,000 to your super fund as a Downsizer contribution. This is only available to those over 60 years of age, however you can still factor downsizing into your retirement plans. Find out more via the ATO website. 

Minimise debts

If you have other debts such as credit cards, it’s also a good idea to focus on paying these off when you are in your 50s. Consider which debt has the highest interest rate and direct your extra repayments to this first. You might also want to investigate consolidating your debt to reduce interest rates and to make repayments more manageable.

The less debt you have, the less money you need on a monthly basis. This is important in retirement, when your income may be lower than while working.

Reset your savings goals

Back when you were saving for a house, you made a habit of putting money aside. Now’s the time to revisit this strategy and look for ways to maximise your savings.

Take a look at your budget and find ways to reduce costs by shopping around for the best deals on electricity or insurance, and perhaps reducing your discretionary spending. The money you save can go towards your retirement fund.

Boost super prior to retirement

Speaking of your retirement fund, talk to your Gold Coast financial advisor about salary sacrificing some of your pay into super before it gets taxed. Lots of Australians in their 50s use this as a strategy to boost their super balance prior to retirement. Limits apply but this can still make a big difference to your retirement fund.

Encourage financial independence

Many people have finished paying for their children’s educations when they reach their 50s. If your kids have flown the nest but you are still providing them with financial support, you need to guide them towards a more independent future.

Due to the high cost of housing in Australia, some parents choose help their children to secure a home by gifting them with a lump sum deposit, and you may wish to do so too if it doesn’t compromise your own financial security. Do try to limit giving adult children money for purchases that bring short-term benefits. This doesn’t serve either of you in the long term.

Speak with a Gold Coast financial advisor

By following these tips, you can make the most of your 50s and set yourself up for a comfortable retirement. For more detailed advice, speak to a financial advisor who can help you develop a personalised plan.

As you approach retirement it’s important to understand the benefits and risks of investing, and to ensure you have the right amount of insurance in place to protect you in the event of a worst-case scenario life event. An advisor can help you analyse your current financial situation, help you set retirement goals and strategize how to achieve them.

Want advice to boost your super prior to retirement? Speak to a Gold Coast financial advisor from Crest Wealth today.

Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice.  Whilst the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact upon the accuracy of the information.