Wealth building in your 50s involves strategic planning and smart financial decisions to increase your retirement assets. 

Here are some practical wealth-building tips:

• You should be maximizing your retirement contributions as much as possible. Here are the 2024 contribution levels:
  • 401(k): $23,000 with an additional $7,500 catch-up contribution for a total of $30,500
  • IRAs: $7,000 with an additional $1,000 catch-up contribution for a total of $8,000

• Evaluate your investment mix to align with your return objectives and current tolerance for risk. It might be time to adjust your asset allocation to better balance risk and reward.

• Work towards paying off high-interest debts like credit card balances. Reducing debt frees up more funds for saving and investing.

• Healthcare costs can be a significant expense in retirement. Consider investing in a Health Savings Account (HSA) if eligible, and look into your options for long-term care insurance.

• Ensure your estate plan is current, including your will, power of attorney, and healthcare directives. This step is crucial for protecting your assets and ensuring they are distributed according to your wishes.

• Maintain a substantial emergency fund to cover unexpected expenses without dipping into your retirement savings.

Retirement planning isn’t just about the balances in your savings accounts; it’s about planning for and realizing a desirable lifestyle once you no longer have the day-to-day pressure of a job. 

As a fee-only financial advisor in New Haven, CT, we help people in their 50s develop customized retirement strategies. Here are some of the tactics that we frequently employ:

• Calculate your optimal claiming age for Social Security benefits based on earnings history, income requirements, and immediate needs; we’ll develop a plan to optimize when you should begin taking your Social Security benefits.

• Something that isn’t discussed often is having a plan that allows you to develop tax-efficient distribution strategies when you have to begin taking required minimum distributions (RMDs) from your retirement plans. The bottom line is to meet your income requirements while minimizing your tax burdens.

• We will evaluate your healthcare options, including Medicare coverage, and discuss whether long-term care insurance is viable for you based on the health outlooks of both spouses.

The term “high-net-worth individual” (HNWI) is used to describe someone who has substantial liquid assets ($1 million or more) that can be used to generate retirement income. A liquid asset can be invested and converted into cash in 30 days or less. 

That’s why your real estate, art, or other collectibles are not factored into the calculator for determining your available assets. It is also important to note some of these assets are not sources of retirement income – the exception is income-producing real estate investments. 

The “high net worth” calculation goes beyond just numbers. It signifies a level of financial security and freedom that allows for:

• Comfortably covering living expenses, healthcare, and education without significant financial pressure.

• Pursuing big-ticket purchases, travel, or starting businesses without significant financial constraints.

• Preserving your wealth for future generations by passing on financial assets that benefit your loved ones. 

As a successful high-net-worth (HNW) individual, it’s essential to work with an investment advisor who can provide:

• Expertise in tax strategies, wealth preservation, and multi-generational planning to address your complex financial needs.

• Custom, tailored financial solutions. A one-size-fits-all investment strategy probably won’t get you where you need to be financially, so your advisor should be able to create a tailored investment strategy that evolves with your needs.

• Align your charitable giving interests with your values and maximize the impact of your philanthropy.

• With sophisticated succession and legacy planning, ensure a smooth wealth transition to future generations.

Feeling anxious about how much you’ve saved for your retirement? You’re not alone; this is the number one concern for millions of future retirees.

• Rising longevity can be a blessing if you plan for it and potentially a curse if you don’t.

• Stress test your retirement plan to evaluate its resilience against various economic scenarios (high inflation, low-interest rates, volatile securities markets).

• Adjust investment strategies and adapt portfolio allocations to manage risk while producing a desirable rate of return.

• Income planning becomes a key factor to ensure you have sustainable income throughout your retirement years (both spouses).

• Live within your means and review your spending habits on an annual basis. 

The erosive impact of inflation should be a significant factor in your retirement planning. Given the persistent inflation that we’ve experienced for the past three years, inflation can significantly erode the purchasing power of your savings over time. 

As the cost of goods and services increases, the purchasing power of a fixed income will decrease, meaning you will need more funds in the future to maintain the same standard of living. This impact requires careful consideration in your retirement strategy to ensure that your income distributions keep pace with rising costs.

Healthcare costs are an essential expense category because their rising cost can exceed the inflation rate.

Adjusting your savings rate, investing in inflation-protected securities, and planning for higher healthcare costs can mitigate inflation’s effect. It’s also wise to include a buffer in your retirement savings to account for unexpected inflation spikes, ensuring your retirement distributions can support your needs through decades of retirement.

Don’t fall into the trap of not planning for inflation.

“Can you count on your retirement savings when it matters most? This could be later in life when you have the fewest options. We are here to help you feel confident that you are prepared for life’s financial twists and turns.”

– Paul Schatz, Heritage Capital

You’ve dedicated years to accumulating retirement assets. As you transition to retirement, it’s time for your investments to start working for you. While many financial advisors are ready to offer services, not all are qualified to provide the advice you need for a secure financial future.

At Heritage Capital, we are an award-winning investment management firm deeply committed to helping you flourish financially during your retirement years. 

In retirement, there needs to be more room for error. You need to make the right decisions from the very beginning. 

Heritage Capital has assisted individuals with their retirement plans for over three decades. Your retirement assets are personally managed by our portfolio manager, Paul Schatz. Paul is a respected authority, regularly featured on business news channels like CNBC, Fox Business News, and Yahoo Finance.

We provide active management services for our client’s retirement assets. This means we are proactive when you invest your assets for you. Our role is to seek competitive rates of return while minimizing our clients’ risk of significant losses. This strategy is consistent with the risk-averse natures of many clients who want growth for reasonable risk.  

We don’t believe in the frequent “wait it out” advice many advisors provide their clients during market downturns. There can be many buying opportunities when prices are lower. At the same time, a primary objective is capital preservation. 

Prolonged-down markets are a significant concern for retirees. You may be distributing 4% of your assets each year to cover your cost of living. Then, 3% inflation is eroding the purchasing power of your assets. And all of this is compounded by markets producing negative rates of return. You must address these issues to maintain the quality of your retirement lifestyle later in life. 

We find this type of risk unacceptable. Our Active Management Strategy seeks to adjust your assets in response to market changes. It requires more effort, but we aim to produce gains in positive markets and protect your assets during negative markets. A buy-and-hold strategy often struggles to produce these results.

By keeping a vigilant eye on your requirements, goals, risks, and investments, we believe we can better adjust to ever-changing market conditions.

Many advisors use third-party managers to invest your assets. As you may imagine, this adds a whole other layer of expense to your cost structure. Plus, a third party manages your assets you have never met. You don’t know them, and they don’t know you. You only hope the advisor passed on accurate information about your circumstances, requirements, time horizons, goals, and risk tolerance.

At Heritage Capital, we are committed to personally overseeing your investments as an AIF® (Accredited Investment Fiduciary). You will collaborate directly with our esteemed money manager, benefiting from the expertise of a seasoned professional with over 30 years of experience assisting retirees in navigating the intricate securities markets.

In addition to hands-on investment management, we function as a financial fiduciary, adhering to the highest ethical standards in the financial services industry. This assurance means you can rely on us for impartial advice that always prioritizes your best interests. It’s crucial to recognize that not all financial advisors uphold this elevated ethical standard; some adhere to a considerably lower one.

As an independent, fee-only advisor, we have no affiliations with corporate owners or product companies that offer commissions for product sales. Our compensation is solely derived from you, our client. This approach minimizes potential conflicts of interest commonly found in the financial services sector.

Contact Us to explore further and gain insights into our comprehensive retirement planning services.