By Tony Collins, CFP®, AIF®, Associate Wealth Advisor
This is part four of a multi-part series on specific financial planning challenges and considerations that many people face over the decades of their adult lives. We hope you’ll find these perspectives valuable.
As you enter your 50s, there’s a lot to think about. We’ll cover three areas: Crafting your ideal retirement; considering the impacts of your children reaching financial independence and becoming mature decision makers; and figuring out what your legacy should look like.
Refine Your Retirement Plan
With your retirement years in sight, it’s important to keep the end goal in mind. A good retirement plan will give you an idea of what it will take in annual savings to retire in your target year – or at least dial back your time spent working once you reach a desired age. This is not something to review once and put away. Rather, it makes sense to check in, at least annually, on how the plan is going.
Have you planned for how you will spend your free time in retirement? One of the biggest non-financial reasons that retirements “fail” is the challenge some people face in adapting to their new routine. This may be the time to look into a new hobby or activity you can enjoy. Or revisiting passions that you didn’t have time for while working full-time. There’s a reason that golf is one of the more popular retirement activities – it can be enjoyed with friends, gets people outside, and keeps them active. Finding time to work with charitable organizations is often a fulfilling and rewarding experience too.
Kids Out Of the House
Frequently, the late 50s is when kids are out of the house and (hopefully) on their own. If this applies to you, you should take a serious look at how your lifestyle could change. What expenses will come off?
With some things, like family cellphone plans or internet subscriptions, it might make sense to continue to support the cost. Bigger items, maybe not so much. Our general thinking is to tie this in with your retirement plan as that should be the #1 priority.
One major item to keep in mind: Does it make sense to downsize your home? As an “empty nest,” a large home may not be worth the time and expense to maintain. If you’d like to entertain this as a possibility, your wealth advisor can help you look at these reductions in expenses to consider how they’d impact your financial plan.
Evaluate Your Legacy and Personal Directives
We’ve been talking about the importance of a well-crafted estate plan in almost every write-up in this series. Think about the legacy you want to leave. When your kids were young, the focus was to protect them and provide for a guardian and financial support should the worst happen. When they are in charge of their own lives, it could make sense to include your adult children in ways that are a form of protection for you – whether that might mean sharing information with them about your Healthcare Directive, having them serve as your healthcare power-of-attorney should one be required, or appointing them as Executor of your estate. Or anywhere in between.
The thinking here is that your children will typically be the most familiar with you and your wishes, and be best suited to carry out your legacy. As kids become independent and financially responsible, we often see their parents remove restrictive measures on when they can receive trust assets. We also often see a portion of a trust carved out for charitable intentions or support for friends and other family members.
These are just a few things to think about as they relate to your legacy and advance directives. There are so many possibilities and avenues to explore in making sure your wishes are met.
We would welcome the opportunity to discuss any of these suggestions with you – and more – to help you and your family set yourselves up for a healthy financial life.
Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment adviser located in Long Beach, California. Registration does not imply a certain level of skill or training. Additional information about HH, including our registration status, fees, and services can be found at www.halberthargrove.com. This blog is provided for informational purposes only and should not be construed as personalized investment advice. It should not be construed as a solicitation to offer personal securities transactions or provide personalized investment advice. The information provided does not constitute any legal, tax or accounting advice. We recommend that you seek the advice of a qualified attorney and accountant. All opinions or views reflect the judgment of the author as of the publication date and are subject to change without notice. All information presented herein is considered to be accurate at the time of writing, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted.