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Saving for Retirement after 50

  Are you fifty years of age?  If so, are you prepared for retirement?  For many, retirement is just around the corner, about at the age of sixty.  While some individuals will find themselves in good financial standing, many more see just how unprepared for retirement they are.

If you are unprepared for retirement, there is good news.  That good news is that it isn't too late to start saving.  If you just turned fifty, you are likely to have little more than ten years to save.  While it won't be as easy as it was when you were twenty, thirty, or forty, it is still possible.

The first step in planning for retirement at the age of fifty is determining how much money you need to save.  On average, financial experts state that most individuals need at least 70% of their current income to financially survive through retirement.  A percentage of that will come from social security benefits.  It is also stated that you should prepare to
spend thirty years in retirement.  

If you have been contributing to a pension plan at work, you are a step ahead.  You likely have a few thousand pounds or more saved.  You will want to keep on contributing.  Be sure to meet the requirements that your company has for matching.  When you do so, your company will match the contributions that you make within certain limits.  This money can go a long away, especially if you are finding yourself unprepared for retirement.

Pension plans are essential for long-term employees.  There are rules and restrictions in many plans and you need to know about these.  If you leave your job within a specified period, you may not receive the company's contribution to your pension plan. If you are employed and you don't consider your company's pension plan to be adequate for your
needs, you can examine alternative, additional pension plans.  

It is also important to examine Individual Savings Accounts (ISAs).  Do you already have one?  If not, now is the time to start.  ISAs give you tax benefits and they are a much better approach than traditional savings accounts.  Why?  Because many individuals find it easier to dip into their savings accounts and spend their money.  Whether you use that money for yourself or give it to family members, it reduces the amount of money that you have for retirement.  

There are two types of ISA, a cash ISA and a Stocks and Shares ISA.  If you are going to be 50 or over by the 5th April 2010, you have a total ISA allowance of £10,200 per tax year.  Up to half of that amount can be in a cash ISA with the other half in a Stocks and Shares ISA.  Similarly if you have £3,000 in a cash ISA you can have up to £7,200 in a Stocks and Shares ISA.

Speak to an investment adviser about saving through an ISA, but you really should take advantage of this method of tax efficient saving.

As previously stated, most individuals will receive social security benefits that account for a percentage of income needed during retirement.  You can request a statement that outlines your benefits.  This statement can give you an idea of how much in social security benefits you will receive overtime.  With that said, this is also just an estimate; therefore, it is not a figure that you should rely heavily on.

Now might also the time to start living on a fixed income.  There are two benefits to doing so.  When in retirement, you will be on a fixed income. You will run into trouble if your money runs out too soon.  Starting to live on a fixed income now can give you practice for when you truly do depend on it.  Also, when living on a fixed income, you are able to reduce your expenses.  Any money that you save can be put towards your retirement.

If worse comes to worse and you are truly worried about retirement, now is the time to supplement your income.  A second job may be the last thing you want or need, but it may help you considerably.  If you do opt for a second part-time job, place any money that you make into a retirement account, whether it be an Individual Savings Account or a normal savings account.  Working a second job when you are fifty is much better than doing so when you are sixty.

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