Investing With Confidence in Your 50s

Investing in Your 50s: 10 Steps to Retirement Planning

Don't fall into the trap of forgetting to evolve your financial planning mindset as you enter new phases of life. In your 50s, questions about retirement savings sufficiency, investment risk tolerance, and tax strategies become increasingly important as retirement is no longer a distant idea, but an upcoming life event.  

Similarly, your mindset may be shifting from not just what you’re building or saving, but how to protect it and what type of legacy you’re looking to leave.  Investing remains a big component of your financial plan, so let’s dig into what we see successful clients focus on in their 50’s that could benefit you as well. 

Planning for retirement isn’t the most straightforward process, but these 10 steps are a great place to start as you enter your 50’s:

1. Assess Your Situation

To build an accurate retirement plan, determine how much you have in the bank. Calculate your total net worth by subtracting what you owe from what you own. You’ll want to have a clear picture of your financial status before you chart your retirement journey.  

This includes cash, investment accounts, real estate, and other assets minus mortgages, loans, and debts. Understanding your starting point is critical for retirement planning because there’s immense value in seeing everything in one place. You’d be surprised how many people still have a fragmented picture of their financial life, and wrapping your arms around the reality of the situation is your first step. 

2. Project Your Future Expenses 

According to Investopedia, most people believe that their annual spending during retirement will be 70% to 80% of their past expenditures. But how accurate is that? 

You must also factor in expected (and unexpected) expenses that may occur. Do you plan to drive the same car for 30 years or might you get a new one every few years? Do you plan to travel more in retirement? These are cash flow changes that were easier to navigate when you had outside income, but once you transition to “paying yourself,” you have to plan ahead to retain flexibility. 

Beyond those pop-up expenses, you should also consider the impact inflation will have on the buying power of your nest egg as well as the cost of healthcare that balloons exponentially as you age. These are factors that, if unplanned for, can derail your retirement to the point you need to return to some form of work to supplement your income. Our goal in retirement planning is to make sure you never have to make a call like that out of necessity. 

Make a list of all your planned costs so you can build those expenditures into your budget. Build a realistic spending plan to inform your income strategy.   

3. Run a Tax Projection

Tax projections help inform how to allocate your existing cash flow so you can minimize taxes today and during retirement.  Work with your CPA or advisor to explore strategies that could maximize your tax advantages:   

• Charitable giving strategies, such as donor-advised funds for tax-efficient donations   

• Partial Roth conversions to reduce future taxes on RMDs 

• Income acceleration or deferral, particularly for business owners, to manage marginal tax brackets over time  

Tax planning in your 50s can be difficult because it requires you to shift from trying to minimize your next tax bill to minimizing your lifetime tax liability. Regular projections and working with an advisor with deep tax experience can be beneficial. 

Keep in mind: as tax law continues to evolve and change, so should your tax projections. This is not a set-it-and-forget-it exercise, just like estate plans and insurance review, they must evolve with you and the current tax policy. Make sure this is a capability your advisor has. 

4. Consider Partial Roth Conversions 

The decade before retirement is crucial because it’s the best time to manage current and future taxes simultaneously. If a large portion of your nest egg resides in IRA accounts, for example, you’ll have significant required minimum distributions subject to income taxes that eat away at your hard-earned savings.    

Moving traditional IRA funds into Roth IRAs strategically can:   

• Reduce future required minimum distributions (RMDs)   

• Create tax-free income streams later   

Conversions are not all-or-nothing. Spreading them over multiple years can keep you within your current tax bracket and optimize results in the future.  

Consult an advisor before executing these strategies, because if done wrong, a partial Roth conversion may leave some of your potential savings on the table and cost you money in the long run.   

Being intentional about your conversion, paying taxes with regular cash flow, and working with a trusted advisor are some ways to avoid costly partial Roth conversion mistakes.  

5. Maximize Retirement Contributions 

Take a strategic look at your current retirement funds and whether or not you’re fully optimizing the tax advantage of each. A few small changes to funnel cash into tax-advantaged accounts could make a huge difference in the long run.  

Every year, the IRS determines the maximum contribution limits for IRAs and 401(k)s. In 2025, those limits are:   

• 401(k)s: $23,500 + $7,500 catch-up if age 50+ = $31,000 total  

• IRAs (Traditional or Roth): $7,000 + $1,000 catch-up = $8,000 total  

• HSAs: $4,300 (self-only) or $8,550 (family), with a $1,000 catch-up for age 55+  

If you feel like your contributions fell behind in the early decades of your career, catch-up contributions can be powerful tools to bolster savings in your final pre-retirement years.