Tips for financial planning in your 50s

Financial planning in the 50's involves a few adjustments to financial planning in the 40's and sometimes a brand new financial plan. In the 50's, if one hasn't retired already, there are about 6-16 years left before the Government starts paying back in the form of social security. Until then, financial planning ideally involves some unique investing, budgeting and saving tactics. A few of those techniques are illustrated in the following paragraphs.

Investing

Conservative investing: One can't afford to lose huge amounts of money in the fifties unless millions of unaccounted dollars lay in forgotten investment coffers from many years ago. For this reason conservative investing is key and is considered the ideal investment strategy for older adults by many financial consultants and retirement planners. Conservative investment isn't always low risk but involves hedging against volatility through diversification and portfolio percentage asset allocation.

Portfolio percentages: Portfolio percentages are the percentage allocation of one's assets in type of investment risk. For example, one may have 25% of one's assets in a house, another 25% in an Individual Retirement Account (IRA), 15% in stocks, 15% in treasury bonds and 20% in annuities. During the fifties, a portfolio allocation that is less vulnerable to heavy fluctuation and more prone to steady growth may be desirable.

Dividend stocks: Some stocks pay dividends and appreciate in capital value. These types of stocks are useful for long term investors who don't plan on trading a lot. If the companies are financially strong with good outlooks, they can pay up to 5% in dividends on top of any capital gains.

Budgeting

For many people, budgeting is a reality. Budgets help save money, keep spending under control and can allow one to invest for retirement. Managing an acceptable budget may involve 1 or 2 lifestyle changes but could yield financial stability in the future. Good budgeting is fairly straightforward and involves the following methods:

• Keep expenses under control
• Save money for a rainy day
• Spend according to needs rather than wants
• Look for ways to improve financial performance in all respects
• Maintain spreadsheets and/or organize financial paperwork and tax documents

Balancing money is somewhat of an art, but it can be exciting and one can allow one to learn new ways to save on taxes, make money go farther and discover new ways to work with money. Effective budgeting requires a semi-perpetual attention to financial concerns, objectives and needs, but is often for the best.

Saving

A third part of financial management in the fifties is saving. One can save through a mortgage, retirement accounts, savings accounts, money market account or treasury bonds because they may all be secure places to put money except in the case of the IRA which may involve some risk.

Having access to liquid capital is also important for emergencies, budget short falls, or other complications that may arise. What's more having some money in savings prevents one from withdrawing money from retirement accounts and paying an early withdrawal penalty.

Financial planning in the fifties may be a new challenge or an adjustment to an old strategy. In either case, the older one becomes, the more important financial planning can be if one wants a safe and comfortable retirement. What's more, even in the fifties unforeseen circumstances may arise such as medical problems, job layoff, natural catastrophe etc.

Financial planning can help one prepare for these things in addition to building capital wealth and maintaining standard of living. Also, if one is still unsure about how to go about financial planning even after researching and thinking about the matter, a financial planner that is certified by the Certified Financial Planner Board of Standards may prove helpful in addition to the above tips.