Financial Tips for Your 50s
As you get closer to retirement age, there are things you can still do now that will make a big impact in the future.
Investigate your retirement accounts
Start with your CalSTRS or CalPERS retirement benefits. You’ll find links to benefits counseling, workshops, benefits calculators, and more at www.calstrs.com and www.calpers.ca.gov. You may also have pensions and retirement accounts from past employers. Round up information about all of them.
Review your healthcare coverage
Find out if your employer will continue to cover you and your spouse under the district's insurance plan and what is included in that policy. You’ll also want to explore retiree medical benefits and eligibility requirements through a spouse. Learn about your Medicare options, costs, and when you can apply. Even if you’re ineligible for full Social Security benefits at age 65, you probably qualify for Medicare. The Medicare website has several helpful pages. There is a penalty for late enrollment, so be sure to apply for Medicare about three months prior to your 65th birthday at your local Social Security office, or call 1-800-772-1213. Depending on your Medicare choice, you may want to supplement your coverage with a Medigap policy.
Gather Social Security benefit information
If you have Social Security earnings from a past job with a non-public school employer or through a spouse, now is the time to determine how your benefit will affect your retirement income.
Develop a retirement budget
Most educators find they need to replace 90% to 100% of their pre-retirement income to maintain a comfortable lifestyle in retirement–even more if retiree medical insurance is not available through your district. To ensure that you’ll be able to live on what you’ve saved for your retirement, start by reviewing your anticipated expenses once you retire. You’ll want to include new activities and potentially higher health care costs, along with all of your income sources: Social Security, pensions, retirement accounts, and other assets.*
Consider saving more in your retirement plan
Starting at age 50, you can contribute more to your retirement plan. This is sometimes called "catch-up" contributions. The amount you can save depends on the type of plan you have. You can find out more by visiting the IRS website on catch-up contributions: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions
Update your estate plan
As a result of changes in your personal and financial situation, you may need to adjust your estate plan. Make sure that primary and contingent beneficiaries on retirement plans, brokerage accounts, life insurance, and other assets not controlled by your will are up to date.
Manage your portfolio
Rebalancing (adjusting the percentage of your portfolio in stocks, bonds, or other investments) is important to consider as you near retirement. It can help ensure that your portfolio matches your timeline, goals, and risk tolerance. You may also need to move a larger percentage of your 403(b) or 457 assets from more aggressive investments (stocks) into more conservative investments (bonds and cash equivalents). If your portfolio has suffered losses, you may need to delay your retirement or accept a lower standard of living in retirement.
Consider long-term care insurance
Buying a policy now may help preserve your nest egg later. You can choose coverage for assisted living, home health care, and nursing home costs that you may otherwise pay out of pocket. You may benefit by locking in lower rates while you’re in good health.
To use the CTA retirement expense calculator, click here.
To find a lost pension, go to: https://www.pbgc.gov/
*Source: CalSTRS participants will not receive Social Security benefits based on their CalSTRS employment, but may be eligible based on other employment or a spouse's income.