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Just because you're over 50 doesn't mean retirement is right around the corner. You may still have another 10, 15, or 20 years of work ahead of you.
On the other hand, if you're over 50, it's time to get serious about retirement planning. And that means focusing on these three key things.
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One big misconception about catch-up contributions in retirement plans is that you need to be "behind" on savings to make them. All you need to do is be 50 or older. That's it. And if you can swing those extra contributions, they might get you closer to your long-term savings goals.
This year, IRAs max out at $7,500 for savers under 50, but you can make a catch-up contribution of up to $1,100. If you have a 401(k), your pre-catch-up limit is $24,500. But this year's catch-up maxes out at $8,000.
Now, if your taxable earnings are $150,000 or higher and you have a 401(k), your catch-up contribution must be made in a Roth account. If your employer's 401(k) doesn't have a Roth component, a catch-up contribution may be off the table. But otherwise, it helps to sneak that extra money into your savings if you can.
A lot of people assume Medicare will cover long-term care, such as home health aides, assisted living, or nursing home stays. Well, here's the bad news -- it won't.
Medicare won't pay for custodial care, which encompasses help with everyday living. If you don't want to have to foot a potentially enormous bill for long-term care without help, it pays to explore your options for long-term care insurance.
The optimal time to apply for long-term care coverage is generally during your 50s. That way, you're not paying those premiums for too many years, but you may also be young enough to lock in affordable costs based on your health.
The earliest age to claim Social Security is 62. At this point, you may not be ready to file for benefits for many years, but it pays to read up on the program's rules and understand how everything works.
It's also smart to develop a Social Security filing strategy, since your claiming age affects the monthly benefit you receive. Waiting until full retirement age, for example, guarantees your monthly benefit without a reduction, while delaying your claim could yield significantly larger benefits.
You don't need to narrow down every specific detail of retirement when you're still years away. But if you're older than 50, it's a good time to look at boosting your savings, research options for long-term care insurance, and learn more about how Social Security works.
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after.
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Over 50? 3 Things You Should Be Doing to Prepare for Retirement Already was originally published by The Motley Fool
