4 Tips for Retirement Planning at Midlife

Financial planning for retirement becomes crucial during a person’s midlife years (late 40s into the 60s). “Whether you’re late to the party or moving forward with bigger plans, working with a retirement planning checklist is a vital tool for everyone in their midlife years,” say Laurent Carrier, a financial planner and owner of Carrier Financial Services LLC in Colorado Springs, Colorado.
 
"At midlife, your income is usually a better than when you were younger, so you’ve got more information to work with. And if you’re already saving, this period means adding new layers to your existing retirement plan so that it can bloom into something bigger. If not, it means buckling down and making up for lost time," advises Carrier.
Here’s 4 Tips to creating your own retirement planning checklist for mid-life:

1. Retirement Planning at Midlife — Make Sure Saving is Second Nature
By the time you reach your late 30s, you should already have a good handle on tucking money away for retirement. U.S. News and World Report explains that you should have about 1.4 times your annual salary set aside by the time you’re 35, 2.4 times when you’re 40, and 3.7 times by age 45. When you reach 50, you’ll want 5.2 times your annual salary saved.

Laurent Carrier says that in your 40s, you’ll want to have a nice, long chat with a financial planner. They can help spot problems, and give you a more accurate idea of your overall financial fitness as it applies to retirement. If you aren’t maximizing 401(k) or IRA contributions, now is the time to take advantage of every tax deferred penny.

2. Invest With Purpose
If investments make you nervous, they shouldn’t. You don’t have to watch the market every day and read all of the financial magazines, although that doesn’t hurt. And you don’t have to be a hard-core trader to put your money to work so that it can grow.

Carrier explains that you should think like a pension manager, since that’s what you’ll be doing. A trader takes lots of high risks in the hopes of a major payout. A pension manager understands the goals of any investment and forms a slow and steady strategy that helps meet the future need. “The result is a calmer, more predictable investing style that more often meets its goals,” says Laurent Carrier.

3. Set Goals and Priorities
Mid Life.  There is a reason that this time is famous for crazy antics and crises.  But, a midlife crisis does not have to be a bad thing. Your 40s and 50s are an ideal time to take stock of what you have done and what you still want to do.  With whom do you want to spend time? Where do you want to live? What do you want to be doing? All of your goals and priorities should be worked into your retirement planning.

4. Bump Up Your Savings When the Kids Leave Home
As your kids get older, you can probably cut back a little more, streamline your budget and build up your savings. And, research shows that when the kids leave home (or graduate college), is a huge opportunity to really start saving a lot more for retirement.  The idea is that you start saving all of the money you have spending on the kids.

Midlife is the Time for Key Decisions and Taking Action
As discussed, saving and saving more is key during mid life. Getting a handle on your retirement plan is another critical checklist item. But, there are also many other big decisions to make and instead of just thinking about retirement, you need to take some actions cautions Laurent Carrier. The following factors can drastically impact how much retirement savings you will eventually need:

• If you’re a homeowner, you probably want to consider whether you’ll stay put and pay off the house, or if you’ll likely have a mortgage in one location or another forever. Housing is usually a household’s most costly expense.  You will need a lot less in retirement savings if you have paid off your mortgage.
• Can you get serious about paying off debt?  Especially non mortgage debt?
• Health issues might emerge during this time that direct your planning toward long-term health care, and you’ve got a good handle on your money management style.
• Will you help your kids pay for college or prioritize retirement savings?
• When do you want to leave your current job?  Will you transition into retirement or stop working cold turkey?

Now is the time to set more focused goals and tweak your saving and investing strategies to make your retirement exactly what you need it to be.

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About Laurent Carrier and Carrier Financial Services LLC
Laurent Carrier is the owner and founder of Carrier Financial Services LLC. For over 40 years, his mission has been to provide honest, simple financial advice to his clients. As a well-respected community leader, Laurent has served on the board of the American Red Cross and is now on the Advisory Board with the Colorado College Summer Music Festival. He is enthusiastic about supporting non-profit educational organizations locally, nationally, and internationally. For more information, contact Carrier Financial Services LLC, 919 North Weber Street, Colorado Springs, Colorado 80903. 719-249-4774 or visit online at www.carrierfinancial.com