Yesterday was your 54th birthday and you realized that you are no longer in your 40s! Yes it takes 4 years to realize that. Now you may feel as though you do not have much time to accumulate wealth. Partially true, but only partially – you probably have a lot more time than you think. That means you can have far greater financial security if you act sensibly, and smartly. What does “acting sensibly and smartly” mean?

Plan 101: It starts by having a plan. Immaterial of your confidence (or overconfidence) it is now important that should have a financial plan and have it checked by a person of good repute in planning. He need not be a good wealth manager, but he should be a thorough financial planner. If you are in your 50s, the value of having a financial plan is greater than having a plan in your 20s.

You and your spouse simply must know what it costs you to live and how you are going to generate that income when you stop working. Of course this is absolutely the first step towards Retirement Planning. It is more important for those still working. What happens if you find yourself “suddenly unemployed”? Worse, in a young country like India you may just find yourself UNEMPLOYABLE too!  You may have planned on working another decade or 15 years but your boss may have other not so great ideas. If you are in your 50s and get fired it can sink your financial plan completely. What if your parent / spouse / elder sibling needs a lot more care and you are forced to take up a simpler job or just give up everything to concentrate on giving CARE?

This risk is often overlooked – but I urge you to look at the aspect of not earning again – go do your homework. Being prepared includes having a plan and tracking your current spending. This way, if the pink slip hits – at least you’ll know what you are up against.

Pare Down

Whether you like it or not, accept it or deny it, retirement is closer than you think! If a person calls you asking you ‘do you want a Retirement Plan….it may not be a pension salesman.it maybe an agent friend of your boss!! If you are in your 50s the world is already asking you “When are you Retiring” . In a few cases many cases that means you’re going to have to make due with a little less income. Some time dramatically less income. Women will have more husband and less money – an awful combination, did you say?  Why not start getting ready for that day by reducing your expenses right now? Yes you have to make emotional changes too, start with financial changes first.

It makes sense to start practicing living on less as soon as possible. If not done already, do now. There is no downside to learning this, is there?

Look through your spending and carefully evaluate every single expenditure. Are you spending your time and money optimally, and sensibly? Have you got used to some expenditure just because it is ‘reimbursed’ – there will be no employer to reimburse once you  retire. You are just changing your priorities, that is all. You are not ‘sacrificing’ anything. When you say “yes” to one thing, you say “no” to something else.

For example, if you are paying Rs. 8000 a month dining out, great. Translate this to say one annual vacation for you and your spouse if you did not eat out? Or hiring a cook who will cook for you twice a day EVERYDAY ? Or a bigger retirement corpus at age 65?  Is it worth it? What are your priorities?

Just remember that even though you may have  lesser money, you still have a lot of choices. Make the most you can of the time and money you have. Life does not give a 50 year old too much chance to correct its mistakes, so be careful.

Your financial plan an invaluable tool that can really help you see the big picture. High time that you had a  proper financial plan that you and your spouse understood.

• Do you still own life insurance? You may not need it anymore?
• Are you helping your adult children? Do you/they realize the real cost of this? Can you afford it? Readolly?
• Can you downsize your home? Downsize your car?
• Will downsizing mean you can retire at 58 instead of 65? (assuming your employer loves you!!)
• What’s important about money to you? How should the rest of your life to look like? What do you have to do in order to achieve that?
• Do your assets need to be reallocated?
• Have you made a will? A Living Will? A Medical Power of attorney?
• Do you have enough medical insurance? Do you need to enhance it? Do you  need to take a top up?
• What Long Term Care Plans have you considered?
• Are you still providing support to your parents – physical or financial?

These are the big questions that we rarely think about or consider because day-to-day ‘urgent’ life gets in the way of ‘important’ things! When we enter our 50s it  makes sense to focus on finding the answers.

I have found that once we get a clear picture on our priorities it’s easy to see how to prioritize how we spend our time and assets in order to live more sensibly and fully.

Like most people I know do you wish you had started  a few years earlier?