Maurie Backman (TMFBookNerd) Your golden years are right around the corner. Here's what you need to do now. Your 50s are a pivotal time on the road to retirement. Chances are, you'll be earning more money in your 50s than you did earlier on in your career, which means you'll have more financial flexibility than ever before. On the other hand, you may have more expenses to deal with, like your kids' college tuition bills. Still, if you want to retire comfortably, you'll need to spend your 50s focusing on goals that can help make that happen. Here are a few to target. 1. Build a fully loaded emergency fund Without a solid level of savings, you risk racking up debt the next time an unplanned expense comes your way. And taking on debt in the years leading up to retirement increases your risk of carrying that financial burden into your golden years and struggling for it. A better bet? Amass a healthy emergency fund -- ideally, one with enough money to cover up to six months' worth of living expenses. This will help you avoid debt if you lose your job, encounter a whopping home repair, or get hit with unusually high medical bills. 2. Boost your nest egg Once you turn 50, you have a prime opportunity to catch up on retirement savings. That's because IRA and 401(k) contribution limits are higher for workers 50 and over. Currently, you can contribute up to $7,000 a year to the former, and $25,000 a year to the latter. Capitalizing on catch-up contributions can boost your savings in a meaningful way. If you're 57 today and want to retire at 67, setting aside $25,000 a year between now and then will leave you with an extra $345,000 in your nest egg, assuming your investments generate an average annual 7% return during that time. Even if you can't max out a 401(k), aim to ramp up your retirement plan contributions during your 50s so you're sitting on extra income once your golden years roll around. 3. Fund a health savings account Healthcare is one of retirees' greatest ongoing expenses. That's why it's smart to contribute to a health savings account, or HSA, during your 50s. The money you contribute (on a tax-free basis at that) can be invested so that it grows into a larger sum, and as long as you use that money for qualified medical expenses, you can take withdrawals tax-free. To be eligible for an HSA, you must be enrolled in a high-deductible insurance health plan (meaning, an annual deductible of $1,350 or more for single coverage and $2,700 or more for family coverage). You can contribute up to $3,500 to an HSA as an individual this year, or up to $7,000 for a family, and if you're 55 or older, you get a $1,000 catch-up contribution to boot. 4. Pay off your mortgage Right up there with healthcare, housing is another expense that tends to eat up a large chunk of retirees' income. Therefore, if you're able to pay off your mortgage in time for your senior years, you'll have one less monthly bill to worry about. One relatively painless way to chip away at your mortgage is to take your monthly payment, divide it in half, and pay that amount every two weeks. In doing so, you'll make an extra mortgage payment each year. Uphold that practice for your entire 50s, and there's a good chance you'll be housing-debt free by the time your career closes out. 5. Buy long-term care insurance It's estimated that 70% of seniors 65 and over wind up needing some form of long-term care. And without insurance, the costs can be astronomical -- think $48,000 a year, on average, to reside in an assisted living facility, and roughly $90,000 to $100,000 a year, on average, for nursing home care, depending on whether you get a private room. Without long-term care insurance, you'll be on your own to cover these costs, since Medicare won't pick up the tab, so rather than run that risk, apply. The best time to do so is your early to mid-50s. At that point, you're not paying premiums too prematurely, but you're also more likely to lock in a favorable premium rate based on your age and health. The cost of your policy will depend on a number of factors, such as the coverage amount you're looking to secure, so shop around and see what options are available to you. Though your 50s are a time to continue focusing on your career, they're also a time to start thinking seriously about your golden years. Make these smart moves, and you'll set the stage for a financially secure retirement. The $16,728 Social Security bonus most retirees completely overlook 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 $16,728 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. Simply click here to discover how to learn more about these strategies. Job loss, what can you do to stay in your home if you are not working or earning any money?8/20/2020
Job loss can be a very emotional process to live through, and it causes a broad range of practical issues that need resolving as quickly as possible. How are you going to pay your essential bills? How can you put food on the table? And perhaps most urgent if all: how are you going to keep a roof over your head. If you do not receive any warning about the job loss, the need to act quickly is of paramount importance. Several issues need to be considered right off the bat, including whether or not you’re able to find help with paying a mortgage when unemployed. Make your mortgage repayments your priority The chances are your mortgage repayment is your single largest monthly commitment. It, therefore, makes sense to make this your top priority. Unless you have insurance that covers unemployment and pays your mortgage for you, you will either need to find the money to cover your repayments, reach an interim agreement with your loan provider or find a different solution. What should I do first if I lose my job? Talk to your mortgage provider Call your loan provider and tell them that you’ve lost your job. You might be able to arrange an interim solution, such as a payment holiday. The provider will give you advice on what to do next, and how to avoid losing your home further down the line. Financial institutions have a legal responsibility to help you keep your home, so be completely upfront and honest. Check if your mortgage covers repayments through job loss Whether it’s a benefit of your job, a private policy or a feature of your home loan, payment protection insurance could cover repayments for a period. These policies cover you for redundancy, so they should be your first port of call. However, most of these policies have a time limit, so you need to claim as quickly as possible. There’s a chance that you were sold this type of protection without realising it, so don’t assume you have no insurance in place. Contact your mortgage provider, your credit card companies, your bank and any institution with whom you have a loan to see if you have payment protection. If for any reason you make a claim for payment protection, and it is refused, all might not be lost. If you didn’t ask for the policy, you should be able to claim back all of the payments, as well as any interest your money would have earned. These funds could be enough to pay your mortgage repayments. Job loss – check if you’re entitled to benefits If you lose your employment through no fault of your own, and you don’t have significant savings in the bank, you should be eligible to claim Jobseeker’s Allowance straight away. You may also qualify for help with mortgage interest repayments through the Support for Mortgage Interest scheme. If you’re eligible, these payments will be made directly to your lender. Qualifying criteria for Support for Mortgage Interest You must qualify for certain benefits to get help with your mortgage interest payments:
What are claimants entitlement? You may be able to claim interest repayments on a mortgage of up to £200,000, but only after a 30-week waiting period — after first claiming benefit. If you’re claiming Pension Credit, the financial help might be available straight away, but only on mortgages of up to £100,000. In both cases, there is no support for capital repayments, so you will either have to find a new job or take more drastic action. I can’t afford my mortgage repayments. What next? First, contact your home loan provider and be honest about your situation. There may be some options available to you at this stage: Adding arrears to your mortgage Taking a repayment holiday (but only if the facility is available with your mortgage product) Working out a bespoke repayment plan (this is a short-term solution that will depend on your current standing with your provider) Selling your house and settling your mortgage Repossession (which will require a court order) Job loss – help with selling your home If you’re out of work and facing mortgage arrears, it is highly unlikely that you’ll be able to add arrears to the capital portion of your mortgage. Similarly, a repayment holiday may also be a non-starter. If you let the bank repossess your home, you will incur further costs, adding to your debt burden going forward. Also, your credit status will be adverse — affecting your ability to obtain another home loan when you get back on your feet. The most sensible and proactive solution is usually to sell your home and use the proceeds to pay off your mortgage. A bank won’t often pursue a repossession order until you’re at least four months in arrears, so act fast, and take control of your financial future and stop any potential repossession. The problems with selling on the open market If you need to sell a property because of job loss, you’re under the gun from the outset. It’s a race against time to cash in on your property and pay of your debt. Although you may find a buyer reasonably quickly, some things may derail your house sale before completion, including:
Selling your home to a house buying service A home buying service such as Flying Homes will value your property based on its features and current market conditions. You’ll get a fair offer that won’t change at the last minute — it’s then your choice to accept or not. If you do accept, there are several benefits of doing so:
Whatever situation you find yourself in after losing a job, acting fast is always the key. If you take control of your mortgage from the outset, it won’t take control of you later down the line. |
AuthorContent gathered & updated by the Bergen Review Media team. Archives
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