West Bank offices will be closed on Thursday, July 4 in observance of Independence Day.

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West Bank offices will be closed on Thursday, July 4 in observance of Independence Day.

West Bank offices will be closed on Thursday, July 4 in observance of Independence Day.

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How to Redefine Retirement in Your 50s

Age 50 is a major milestone. Not only does it mean you’ve lived for half a century, but it also comes with some key advantages that can ensure you are saving enough for retirement.

If you want to retire at 65, you only have 15 years left at age 50 to make sure you have enough money saved to accomplish your goals. That may not seem like a long time, especially if you’ve been working for the last 25-30 years, but there’s still time to ensure you will have what you need. Following are six steps to help you determine if your retirement plan is on the right track.

  • Eliminate debt — By age 50, you should have been able to eliminate or come close to paying off some of your largest debts, including student loans and a mortgage. Look at your remaining debts and prioritize paying them off quickly so you can contribute more to your savings.
  • Start planning what you want to do in retirement — What you want to do after you retire will determine how much money you need to save before you can do so. Start examining what your plans will include and if the amount you’re saving will allow you to achieve that goal.
  • Learn more about Social Security — How long you have worked and how much you have paid in Social Security taxes will determine your benefit, which you can start to collect at age 62. When you turn 50, you may want to create an account at ssa.gov so you can get a better idea of how much you will be able to collect and how your other savings will impact your Social Security.
  • Pad your retirement savings — At age 50, experts suggest you should have about five to six times your annual salary saved up in retirement accounts. If you are behind in your savings, you are allowed to make catch-up contributions. With a 401(k), you can contribute an additional $6,000 per year for a maximum of $24,000 each year once you reach age 50. You can also contribute an extra $1,000 to a traditional or Roth IRA for a maximum of $6,500 in one year. Calculate how much more you can contribute to ensure you will have enough to retire.
  • Update your estate plan — Age milestones are a great time to review your estate plan and make necessary adjustments. Along with a last will and testament, your estate plan should include a financial power of attorney, health care power of attorney, and a living will. You should also review beneficiary designations on life insurance, retirement plans and other investments.
  • Meet with a financial adviser — Have a professional review your finances and provide an unbiased opinion. A financial adviser can help you gauge whether your savings are on track and help you set a tentative retirement date, so you can rest assured that you will be able to do what you want when you do retire.

 

These tips are provided by the Iowa Bankers Association (IBA), representing banks and thrifts in the state. The IBA serves it members by providing legislative advocacy, training, regulatory compliance, and other services designed to enhance the ability of banks to serve their communities. Learn more at www.iowabankers.com.

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