Alert
Close

Join the Drive to End Hunger! Watch the NASCAR race on Sunday at Kansas Speedway.

Highlights

Open

You and Your Town Contest-You could win an AARP RealPad

AARP Auto Buying Program

Contests and
Sweeps

$10,000 Games Galore Sweepstakes

Sept. 3, 2014 - Oct. 14, 2014
Play AARP Games for a chance to win $10,000!
See official rules. 

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular
articles

Viewed

Nothing has been viewed

Smart Money Moves to Make by Age 50

5 useful tips to get your personal finances in order

AARP Recommends 5 Necessary Financial Moves When You Turn 50- a dollar sign piece in a game of chess

At this phase of your life, you don’t want financial mistakes to derail your retirement game plan. — Photo by Peter Crowther/Ikon Images/Corbis

En español  |  If you’ve been procrastinating on money matters, now is the take-control moment for you and your finances. Below are five smart financial moves to help keep your next 50 years financially sound.

1. Speed up paying down debt.

You don’t want to be dealing with mounds of debt as you work those last few years before retiring. Calculate your current debt load and start paying off larger debts as soon as you can. This includes any car loans, mortgages, large credit card balances and personal loans that you’ve been carrying around for a while.

Most retirees who own their homes free and clear will tell you that living without a mortgage is financially liberating.

The issue of the tax benefits associated with a mortgage usually comes up when people are faced with the decision of paying that loan off ahead of schedule.  “I've always said not to let the tax tail wag the dog,” says Aric Jacobson, a certified financial planner in the San Diego, Calif., area. “There certainly can be a big incentive to keep that nice mortgage interest deduction going. But we are talking about debt. The higher the interest rate, the stronger the argument for paying the debt off sooner.”

Jacobson says that if you can enter retirement without a big mortgage payment, you can most likely live on a lot less. If you can’t eliminate your mortgage altogether, consider slashing your housing costs by refinancing your home loan at a lower interest rate. If you do choose to refinance, “You don't want to refinance into a term longer than your current mortgage,” Jacobson says.

2. Look at your life insurance.

If you don’t have life insurance, or think you may be underinsured, now is a good time to consider your and your family’s life insurance needs. The American Council of Life Insurers recommends having life insurance coverage of seven to 10 times your salary. So if you’re earning $50,000 annually, you’d want a policy that would pay your beneficiaries between $350,000 and $500,000.

Again, this is a broad rule of thumb and life insurance experts caution that your own individual needs may vary greatly based on such factors as:

  • the amount of debt you would want paid off.
  • how much money (if any) you’d want to leave your spouse, children or relatives.
  • the number of charitable contributions you’d like to make upon your death.

“The need for life insurance doesn’t end when someone hits a magic age,” says Dave Simbro, senior vice president at Northwestern Mutual Life Insurance. “People often find when they reach their 50s, right when their term insurance might be expiring, that their life insurance needs actually increase.”

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Related Video

Financial expert Jane Bryant Quinn says many people aren’t well positioned for retirement because they didn’t have a realistic plan. Hear her advice on what you need to do before taking a leap. Watch

Tell Us WhatYou Think

Please leave your comment below.

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Life insurance: you are covered rain or shine

Exclusive annuities for members from AARP Lifetime Income Program from New York Life.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

Homeowners Insurance
Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points