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Top 6 Ways to Build Wealth in Your 50s

Dec 07

Friends In Their 50s Celebrating Building Wealth

When you reach 50, retirement is starting to seem within reach. But, you still have at least 10 to 15 years of work left, which is a good amount of time to positively impact your burgeoning retirement account. So, in your 50s, consider it a great time to assess where you’re at with your retirement accounts, your lifestyle, and your overall financial situation.

If you review your overall financial situation and find that you’re behind on your goals, or want to ratchet your savings up a notch, here are some great steps to take in your 50s:

Save your bonus check.

When you were younger, you might have spent your bonus on a vacation, a down payment on a new car, or other “wants”. Now, it’s time to sock away that extra money for the future. The same goes for commissions and pay raises. Basically it’s time to keep your income steady and save everything above what your “normal” income is.

Maximize retirement plan contributions.

If you’re not doing it already, now is the time to max out contributions to your retirement plan. Contribute the maximum allowed to your 401(k) as well as any IRAs.

In addition, when you turn 50, you’re allowed to start making catch-up contributions to your retirement plans. Specifically, contribution limits are relaxed a bit, so you can channel an extra $6,000 into your 401(k) and another $1,000 into your IRA. And it’s tax-free!

Don’t take money out of your 401(k).

If your kids are headed off to college, it can be tempting to want to withdraw from your 401(k) to help finance tuition and living expenses. But don’t do it! You’ll pay a hefty penalty, typically a 10% premature distribution penalty in addition to owing taxes on the money you withdraw. You’re much too close to retirement and have worked too hard to put yourself at risk by doing this.

Pay down your debt

Your 50s are typically your highest earning years, which makes it a great time to aggressively pay down your non-mortgage debt. Specifically think car loans, credit cards, and any other miscellaneous debts that are not good to carry into retirement.

Paying off a mortgage may or may not be a good strategy; it really depends on your personal situation. I recommend speaking with your wealth advisor before making a decision like this.

Implement tax-saving strategies

Higher earning years mean higher tax brackets, so this is also a good time to look at tax-saving strategies. Some possible options include:

  • Directing more money into tax-deferred savings vehicles like 401(k)s or traditional IRAs.
  • Consider donating appreciated assets to charities.
  • Discuss tax loss harvesting strategies with your wealth advisor

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Bart A Zandbergen, CFP® is a Registered Investment Advisor with Optivest, Inc and a Registered Representative with Gramercy Securities, Inc. Investment advisory services are offered by Optivest, Inc. under SEC Registration and securities are offered through Gramercy Securities, Inc., member FINRA & SIPC, 3949 Old Post Road, Charlestown, RI, 02813, 800-333-7450.


Investment advisory services are offered by Optivest, Inc. and securities are offered through Gramercy Securities, Inc., member FINRA & SIPC. Securities are not FDIC-Insured, are not bank-guaranteed and may lose value. This website is provided solely for Optivest, Inc. clients and does not intend to provide investment, tax or legal advice. Be sure to consult with your own tax and legal advisors before taking any action that would have tax consequences. All references to Optivest on this website refer to Optivest, Inc. (a California Incorporated company) and all references to Optivest Properties refer to Optivest Properties, LLC. Optivest, Inc. does not represent that the securities, products, or services discussed in this website are suitable or appropriate for all investors. Information herein is taken from sources deemed reliable and neither Optivest, Inc. nor Gramercy Securities, Inc. is responsible for any errors that might occur. Optivest, Inc. may only transact business in those states and international jurisdictions where we are registered/filed notice or otherwise excluded or exempted from registration requirements. The information on this website is not intended for distribution to, or use by, any entity or person in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject Optivest, Inc. or Gramercy Securities to any registration requirement within such jurisdiction or country. The opinions expressed by vendors or third parties are those of the author(s) and are not necessarily those of Optivest, Gramercy or their affiliates. All links to other Internet websites (“hyperlinks”) are included as a convenience for our visitors and Optivest, Inc. assumes no liability for the content or the presentation of such linked sites. No part of this website may be reproduced in any form, or referred to in any other print or electronic publication without the express consent of Optivest, Inc. The material has been prepared and is distributed solely for information purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading strategy. No representation or warranty is provided for any software that may be downloaded from this website. Copyright © 2016 Optivest, Inc.

Securities offered through Gramercy Securities, Inc., 3949 Old Post Road, Charlestown, RI 02813, 1-800-333-7450

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