What Financial Moves Should You Make After Turning 50?

After age 50, the three most valuable moves are using higher retirement contribution limits, reviewing your life insurance coverage, and taking a tax bracket inventory to balance pre-tax and Roth savings before retirement.

Key Takeaways

• The IRS allows additional retirement contributions once you reach 50, and the extra savings can compound over the final decade of work.

• Life insurance bought in your 30s, when you had a large mortgage and young children, may no longer match your actual risk. Waiting to review it only makes coverage more expensive.

• The years before retirement are your last real window to control how much sits in pre-tax accounts versus Roth accounts.

• Once Social Security and required minimum distributions begin, that flexibility largely disappears.

Why Catch-Up Contributions Matter at 50

Reaching 50 gives savers extra room to contribute to retirement accounts. For someone about ten years from retirement, that added space can grow into a meaningful sum through compounding. The IRS adjusts contribution limits each year, so confirm the current figures for your specific account type before you set your contribution amount.

Why You Should Revisit Your Life Insurance Coverage

Many people have not reviewed their coverage since their 30s. A policy that fit a big mortgage and young kids may no longer reflect your real risk. The cost of coverage generally rises with age, so postponing the review tends to make any adjustment more expensive.

"The policy that made sense when you had a big mortgage and young kids might not match your actual risk anymore."

• Warren Burger, Financial Advisor

What Is a Tax Bracket Inventory, and Why Does It Matter Before Retirement?

A tax bracket inventory is a review of how your savings are split between pre-tax and Roth accounts, and which tax brackets your future income is likely to fall into. The years just before retirement are your last real chance to shape that mix. After Social Security and required minimum distributions start, income is increasingly dictated by rules rather than choices.

"The years before retirement are your last real window to control how much of your money is sitting in pre-tax accounts versus Roth."

• Warren Burger, Financial Advisor

Next Steps After Turning 50

1. Check your contribution capacity: Confirm the current catch-up limits for each retirement account you hold, then adjust your contributions.

2. Review your coverage: Compare your current life insurance policy with your present mortgage, dependents, and income needs.

3. Inventory your tax brackets: Total your pre-tax and Roth balances and estimate your future taxable income, so you can decide whether to shift the mix before Social Security and required minimum distributions begin.

This content is educational and is not personalized tax, legal, or investment advice.