These crucial years call for action.
Today, retirement may seem nearer to you than it once did. The following moves might be worth making—and soon.
Catch-up contributions to your retirement accounts. Starting in the year you turn 50, you may make a total of $1,000 in catch-up contributions to your IRAs each year and put an extra $6,000 per year into a 401(k) or 403(b). Fifteen years of $1,000 catch-up contributions to an IRA should grow to about $30,000 at an 8% annual yield. Fifteen years of $6,000 catch-up contributions to a 401(k) or 403(b) should grow to roughly $212,000 by age 65 if the account returns 8%.[1]
Estate plans. If you want to plan to control some of the destiny of your wealth, draw up a will and evaluate trust options that may help insulate assets from probate.
College savings plans. If you have not yet explored the potential of tax-advantaged 529 plans and similar accounts to grow a college fund, now is a good time.
Portfolio reviews. The asset allocation in your portfolio should be reviewed periodically; revising it can potentially help you manage risk and maintain your preferred investment style.
Time is of the essence. The years between 40 and 60 are crucial years in your financial life.
[1] marketwatch.com/story/you-can-make-a-lot-of-money-with-retirement-account-catch-upcontributions-2016-03-21 [3/21/16]