Planning for retirement in your 50s

Your 50s are a time when you really have to put retirement on the front burner. And saving for retirement needs to be your top priority. Here are some key things you need to think about during this period in your life to achieve your financial goals by the time you decide to retire.

First, keep putting 10 percent -- but preferably 15 percent -- of your annual gross income into your retirement savings.

Next, accelerate debt repayment. There are certain to be many claims on your paycheck in your 50s -- retirement, car, college bills -- but if you have some extra cash after hitting your retirement goals, you might want to consider ramping up your payments to get your debt, including your mortgage, paid off by the time you retire. This will certainly be a savvy move to lessen the burden on your savings when you do quit working.

Third, this is the decade to wean your kids off handouts. According to the Pew Research Center, nearly half of middle-aged adults gave financial support to a grown child last year. A lot of would-be empty nesters are continuing to house their adult children, subsidize their rent or paying for insurance. And many baby boomers are finding themselves sandwiched between the needs of their aging parents and their grown children, and they can't take the financial strain.

If you are in this situation, plan what you are going to say, and be direct. Rather than cutting them off cold turkey, experts agree it's best to give them a few months' notice. One way to help them transition is to offer to match any money they save up to whatever amount you deem appropriate. In the end though, you have to be firm and make sure you are going to be able to confront your own financial future in retirement.

Your 50s might also be the right time to reconsider a different professional path. While this tip might seem out of the blue, polls indicate most Americans say they either want to or will have to work at least part-time in retirement. It will be easier to make the switch to a fulfilling position that will fit your preferred lifestyle when you are older while you are at the peak of your professional life.

Finally, review your insurance needs -- both life insurance and otherwise. You should take the time to review all of your policies, know what they cover, and augment them or add to them if you think they are deficient. It is really time to think about the things that could go wrong, even if it isn't the most uplifting. Make sure that if something happens to you, your family is not on the hook and can make ends meet.
  • Mellody Hobson

    View all articles by Mellody Hobson on CBS MoneyWatch»
    Mellody Hobson is President of Ariel Investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts. Additionally, she is a regular financial contributor and analyst for CBS News and CBSNews.com.

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