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Investing & Retirement

Refine your financial goals in your 50s and 60s

As you near retirement, take time to think about your most important priorities. How you save and spend in these years leading up to retirement can have a tremendous impact on your ability to reach your goals and live the lifestyle you’ve always envisioned. Staying on track is more important than ever as you near the end of your working career as you have fewer years to make adjustments.

“Setting specific goals provides a road map that shows you what you need to do to keep your financial plan on track,” says John Lopez, who teaches personal finance at the University of Houston’s Bauer College of Business.

But where do you start? The following steps can help:

Identify specific goals

Your goals have two principal components: what you want to achieve, and how much you’ll need to achieve them.

“Be specific,” Lopez advises. “Saying you want to retire at 60 is too broad. It’s more effective to specify the amount of money you need in the bank to reach that goal.”

That specificity makes it easier to figure out exactly what steps you need to take (and for how long) to reach each goal. Say you’re $120,000 behind in your retirement savings. With 10 years until your target retirement date, you’ll need to try and set aside close to $1,000 a month.

Set your priorities

When you’ve defined your financial goals, including how much money you need to reach each one and the time in which you’d like to achieve them, you can then determine which goals get top priority.

“Your goals are competing for limited resources—your money—so you have to think about which to save for first,” Lopez says.

At the top of your list should be basic financial preparedness, including establishing an emergency fund, paying down high-interest debt, and saving for retirement and healthcare-related expenses. You’ll want to consider making a plan for post-retirement healthcare expenses. Draw up an estimated budget for annual out-of-pocket healthcare costs and explore long-term care coverage options before retiring. Other goals such as contributing to a child’s or grandchild’s college fund can go farther down the list.

Make it automatic

‘Pay yourself first’ by automating your savings. If you’re eligible and participating in your employer’s retirement plan, consider increasing your monthly contribution percentage. At the very least, make sure you’re contributing enough to qualify for any employer matching funds (those are free money)!

And if you’re age 50 or older, don’t forget you can add to your retirement savings with catch-up contributions. For the 2021 tax year, you can contribute an additional $6,500 to your employer-sponsored plan, and an extra $1,000 to your traditional and Roth IRAs.

Schedule an annual review

It’s important to re-evaluate your goals each year and adjust for any changes such as a remarriage or a decision to postpone your retirement date. You’ll also want to review your portfolio’s asset allocation with your Truist Wealth advisor to make sure it still aligns with both your goals as well as your risk tolerance. A more confident retirement is within your grasp. Let us help you reach it.

Interested in learning more about preparing for retirement?

Talk to your Truist Wealth advisor.