Retirement Planning for People in Their Mid-50s and 60s

It may be hard to believe how quickly the years have passed. Retirement is on the horizon, and it’s time to get serious about your plans. Here are a few helpful things to consider as you prepare for this stage of life:

• Evaluate where you are financially. Financial planners would call this evaluation a “financial inventory.” Use our Financial Inventory Worksheet as part of our Preparing for Retirement resources to list all your assets. This would include your 401(k), 403(b), IRAs, investments, savings accounts, home, etc. Include the type of asset, the current value and the location of that asset. By consolidating this information on one page you can easily see what you have and where it is.
• Project when you want to retire. There is nothing magic about retiring at age 62, 65 or even your full retirement age for Social Security. People are living longer, and many people continue to work well past what some would consider normal retirement age. But your retirement date may affect your financial needs in retirement, so it is something you should consider.
• See if you are on target to meet your financial needs in retirement. Most financial planners recommend that the average family will need to replace between 70 and 90% of their pre-retirement income — taking into account Social Security payments, retirement savings or other potential sources of income. The exact amount needed will vary by family depending upon your unique situation. For example, retirees who have large fixed payments, such as a mortgage, may need to have more money available in retirement. To get a better understanding of where you fall when it comes to meeting your financial needs in retirement, check out our Retirement Budget Worksheet as part of our Preparing for Retirement resources.
• Maximize your retirement contributions. Employer-sponsored accounts, such as 403(b) or 401(k) retirement accounts, allow for a very high amount of contributions each year. In addition, those 50 or older may contribute contributions beyond this amount due to their age. Plus, most anyone can open a Traditional or Roth Individual Retirement Account (IRA) if they want an additional way to save for retirement and/or a new strategy for their taxes. If you were not able to contribute to your retirement accounts in your early years, you may want to take advantage of these higher limits to help you catch up.
• Evaluate your asset allocation. Asset allocation is basically how you have your money invested. Most people want to reduce their risk and volatility as they move closer to their retirement date. Make sure you have an appropriate mix of stocks, bonds and cash to meet your needs throughout your retirement years. Make changes if needed. Your MyGuideStone® account provides a place for you to evaluate your asset allocation and utilize tools to determine the allocation that best fits your needs.   GuideStone® offers several helpful calculators that may assist you as you chart the course toward retirement. If you have any questions regarding retirement planning, please contact us at 1-888-98-GUIDE (1-888-984-8433).