In your 30s and maybe even 40s, retirement seemed like something that was so far away. Now that you’ve turned 50, it’s inching ever closer. Saving money over fifty can mean focusing more on building up your retirement accounts. It also means taking steps to reduce your daily expenses and to cut out as much debt as you can before you officially reach your golden years.
Catch up with Retirement
Whether you diligently set money aside for retirement in your younger years or not, turning the big 5-0 means you’re able to make catch up contributions each year. If you have a 401(k) through your employer, you are able set aside $18,000 in 2015, plus an addition $5,500 if you’re over fifty, according to the IRS. If you have an IRA, you are able to throw in an extra $1,000 per year, on top of the $5,500 people under fifty can contribute.
Saving money over fifty doesn’t just mean beefing up your retirement contributions. It also means finding the extra money to put towards your retirement. One way to do that is to think about downsizing, especially if you find yourself in a big, empty house. If you sell your current home and purchase a smaller place or even an apartment, you can put aside the leftover money from the sale (after you’ve purchased a new place) into retirement. Downsizing not only means you can buy a cheaper place. You may also save on property taxes, possibly spend less on your heating and cooling bill since you will be occupying less square footage and you might not have to worry about landscaping or caring for a yard.
Drastically Reduce Debt
If your goal is to retire in your late 50s or early 60s, you want to take steps to dramatically reduce any debt you have before you retire. You want to go into retirement as stable financially as you can be and debt disrupts that stability. Downsizing is one way to reduce your debt, if you are still making payments on your mortgage. If you have a lot of credit card debt, a credit counselor can help you make a plan to pay those off, either on your own or by enrolling you in a debt management plan.
Along with paying off any debt you do have, it’s a good idea to avoid taking on additional debt in your fifties. If you have children who are going to college, resist the urge to apply for a PLUS loan to help them out. PLUS loans tend to have higher interest rates than other federal loan options and remain your responsibility, meaning you can pass them on to your child after he or she graduates.
Proudly Claim Your Senior Discount
A lot of places offer a discount to senior citizens, although the age the discount starts and the amount of the discount can vary. Don’t be embarrassed to claim your senior discount, as you’ve earned it! Check with your favorite local stores to see if they offer a deal to people over age 50. Some places offer a small percentage off purchases, but only certain days of the week. You might be able to get a reduced rate on train or airline tickets and movie tickets, too.
Saving money isn’t just a young person’s game. Take advantage of all the opportunities you have to cut costs or set aside extra savings after turning 50.
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