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12 Key Financial Milestones to Reach by Age 50

Smart money management is a skill that is good to learn and live by as soon as we reach adulthood. Unfortunately, not everyone learns these lessons when they are young adults — including me. When reaching goals like buying a house or retiring are decades away, it can be hard to develop disciplined saving and investing habits.

Growing your nest egg for retirement is just one of several money moves to make as you’re approaching 50. Here is a look at 12 things to accomplish by the time you turn 50, so you don’t have to worry as much about your financial future.

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1. Get serious about your retirement savings

For most people, retiring at age 65 with a pension from a company you’ve worked for 20-plus years is not a reality. And according to the Transamerica Center for Retirement Studies 21st Annual Retirement Survey, 73% of respondents fear that Social Security will not be around to help with financial support after they retire. All of this makes saving and investing for retirement all the more important.

Your goal should be to save enough to cover your living expenses for each year you might live after retiring. A good baseline for saving enough for retirement is to allocate 15% of your pre-tax income into your retirement account. This includes your salary and any employer contributions. If you have a long way to go to meet that 15%, set up a schedule to add 1% or 2% to your contributions per year until you get to that number.

2. Take advantage of employer 401(k) contribution matching

Also, look into the limits for a matching contribution from your employer. There is usually a maximum amount a company will add to an employee’s 401(k) account. Find out what your company’s policies are and see whether you can increase your own contributions to get the maximum match.

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3. Pay off your mortgage

For many people, paying for the roof over your head is one of the largest expenses in the budget. When you’re living on a fixed income, you don’t want to have to worry about making a large mortgage payment. So if you already have a good plan for saving for retirement, paying off your mortgage as soon as possible is another smart goal before 50.

Most mortgage companies allow you to choose where you want extra money to be applied when you make a payment. If you choose to pay more directly to the principal, your overall balance will go down faster than making the monthly payment, which can include interest and taxes.

4. Refinance your home (if it helps)

Refinancing at a lower interest rate or for a shorter term are also ways you can pay off your mortgage earlier. A new loan at a lower rate can save a lot of money in interest and get your balance down faster, provided you don’t take out any equity in cash and continue to make the same payments as before. Refinancing a 30-year mortgage into a 15-year loan will likely make your payment much higher, but you’ll be paying for a lot less time.

5. Rework your monthly budget

Slight adjustments to your monthly budget could result in more money that can be put into retirement savings or applied to the principal of your mortgage. Going without some luxuries, like takeout and entertainment, or using a financial management app like Truebill for a while can result in having extra cash that can go into your mortgage payments or your retirement savings.

6. Pick up a side hustle to make up the difference

If you’re not sure you can afford to have a lighter paycheck as a result of greater retirement savings or putting more money toward the principal on your mortgage, consider picking up a side hustle as an additional way to make money. Whether you opt to deliver groceries, walk dogs, or help others complete home projects on the weekends, having a part-time job that brings in steady money can make it easier to save some extra money. This is an especially good strategy if you’re now at or nearing 50.

7. Purchase life insurance

If you have a spouse or dependents who rely on you for financial support, you definitely want to have a life insurance policy. The purpose of life insurance is to replace the income you provided and cover expenses you would have paid for in life. It also can help pay for your own final expenses.

The Insurance Information Institute recommends considering these factors as a baseline for estimating how much life insurance to invest in:

  • Your current total income (including health insurance subsidies, retirement savings, etc.), total debt, and other annual expenses (seasonal landscaping, legal services, dues, etc).

  • How many years your family may need financial support.

  • How much might be needed for funeral costs and other final expenses. They recommend budgeting at least $15,000.

  • Relocation, taxes, education, and other expenses your family may have in the future.

Once you have a ballpark of what you’re looking for in a life insurance policy, shop around to find the best life insurance coverage for your needs.

8. Earn an excellent credit score

Having an excellent credit score makes many things in life much easier. You get better interest rates on loans and premiums for car insurance, which can result in lower payments and huge savings. You’ll also have some more power to negotiate because lenders will be eager to compete for your business. And if you decide to move into a rental, having excellent credit may make the application fast and easy.

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You’ll also be more likely to be approved for credit cards with higher limits and premium benefits, which gives you more flexibility and buying power. Some ways to improve your credit score or keep it at a healthy level include:

  • Checking your credit reports regularly and disputing any errors.

  • Paying down revolving credit balances so you are using less than 30% — ideally 10% — of your available credit. Here are some easy ways to lower your bills.

  • Making all of your payments on time.

  • Getting a mix of types of accounts on your record, such as credit cards, installment loans, service providers, etc., and establish a long credit history.

  • Keeping hard inquiries to your credit reports to a minimum.

9. Start tax planning for retirement

One of the great things about saving for retirement with a 401(k) or traditional IRA account is that you lower your taxable income for the years you make deposits into those accounts. The balance grows over time, and you won’t owe taxes on the amount you contribute directly to the account or its earnings until you retire and begin to withdraw funds.

The downside is that a portion of your savings will go to the government in taxes while you’re on a fixed income. This is why you should start planning now for how to handle your tax liability going into retirement.

Roth IRAs are a good alternative to a 401(k) or traditional IRA. Deposits to this type of retirement account are post-tax contributions. For example, you could add money to a Roth IRA every time a paycheck clears your checking account or even deposit your tax refunds every year. When it comes time to draw on the funds you have deposited and grown tax-free over the years, you won’t owe any taxes because you’ve already paid them.

Which route is right for you? It all depends on how much you make and whether you’ll pay more in taxes now or after retirement.

10. Have a rough idea of where you’d like to retire

You’ve worked hard all your life and in retirement, you should be able to live however you want — that’s the dream anyway. Give yourself some time to consider where you want to retire, how much money you’ll have to live on during retirement, and the cost of both relocation and living in both your own city and any other place you might like to live.

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Take a look at housing options, relocation expenses, tax impacts, proximity to healthcare and services, ability to get placed independently, how close you will be (or want to be) to family, what kinds of things there are to do, and other quality-of-life considerations. This will give you a good idea if an area really is as attractive as you may think and help you avoid making a mistake when picking a place to retire.

11. Know your options for paying for college

By the time you’re in your 40s and 50s, you may have an older teen who needs to pay for college. If you’ve already established an education fund, you’re ahead of the game when the time comes. But it’s hard to plan for just how much you might have to assist your student with tuition and living expenses when the time to matriculate actually comes.

Try thinking ahead to all the ways you might be able to help pay for your child’s college or trade education expenses. Are private or federal parent loans an option you’d be open to exploring? These are loans you take out on behalf of the student and are responsible for paying back.

Do you have enough in savings now and is it earning interest? You may have opened a 529 Plan or Education Savings Accounts, two education-specific savings products designed to help parents plan for higher education expenses for dependents. If you haven’t, now might be a good time to look into doing so. If that’s not a great option for you, simply keeping any kind of education funds in a high-yield savings account or certificates of deposit can help that amount grow with higher rates of interest than other savings products.

12. Find a financial advisor you trust

When in doubt, talk to a financial advisor. These are professionals who can look at your financial picture today, tomorrow, and years ahead. Whether you are wondering how much you need to sock away for retirement, working toward paying down your mortgage, or tax planning, working with a financial advisor can help you get on track to ensure you’re investing money in the right places to reach your future financial goals.

Bottom line

Although the future is never written in stone, making plans for how you will live once you’re done with your working years is always a smart move. There are many things to consider, such as how much money you will need to live on, whether there are other people you’ll need to support, where you want to live, and what will happen to your wealth after you die.

If you have some concrete plans in place and stick to them, you’ll be in good shape to hit your financial goals by the time you turn 50. The secret to success here is to plan smartly, start as early as you can, and be disciplined in your approach.

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This article 12 Key Financial Milestones to Reach by Age 50 originally appeared on FinanceBuzz.