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Life Stage No. 2: Your 50s and Early 60s

IF YOU’RE WITHIN 10 OR 15 YEARS of retirement, the financial “to do” list can be daunting. This is your last chance to use the income from your human capital to prep your finances for life without a paycheck.

Between now and retirement, you probably want to save as much as you can and get all debt paid off. You need to decide whether to stay in your current home and, if you’ll move, whether it makes sense to move now, while you have a paycheck to cover the costs involved. If you retire before you become eligible for Medicare at age 65, you have to figure out how to cover health care costs. You should also consider how you will cope if you end up needing long-term care. Health care issues are covered elsewhere in this guide.

Pay particular attention to two key questions. First, will you have enough retirement income, and where will this income come from? That means assessing how much you will have saved by retirement, and considering what portfolio adjustments and other steps you should take to turn these savings into a reliable income stream. You should also weigh when to claim Social Security and whether it makes sense to continue working part-time once you leave your fulltime job.

Second, give some thought to what you will do with your retirement. This might seem laughably easy as you imagine sleeping late, lingering over the newspaper, heading out for lunch, taking a nap and so on through the day. But this is unlikely to make for a fulfilling retirement.

Next: A Fulfilling Retirement

Previous: Where to Stash Your Savings?

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