What you can do to prepare financially in your 40s, 50s & 60s

As you move from one life stage to the next, your financial needs and priorities are likely to change. While you’re in your 40s, retirement probably seems a long way off and your focus might be on saving money and paying down your mortgage. But as you enter your 50s and 60s, you might start to think about making the most of your final working years and boosting your super as much as possible.

By understanding how to make the most of your finances at every age, you’ll start feeling more confident in your financial decisions – plus have the financial security and freedom to enjoy the lifestyle you deserve.

While everyone’s financial situation is different, here are a few ideas for setting financial goals in your 40s, 50s, and 60s.

Money saving tips in your 40s

Woman in her forties uses a smartphone to plan her finances

They say life begins at 40 – so if you haven’t started putting money towards your financial future, now could be the perfect time to consider starting.

  • Establish a savings goal: It can be helpful to bucket your income into expenses, short-term and long-term savings goals, then work towards ticking each of your goals off one by one.
  • Set up automatic transfers: Scheduled bank transfers make it easy to put an amount from each pay into your savings first, so you know what you have left to spend.
  • Pay down your debts: With the cost of living and interest rates on the rise, paying off your debts if more important than ever. If you’re paying the minimum repayments, then you may only be paying interest without chipping away at the principal amount.
  • Consider getting insurance cover: Insurers could apply additional premiums or exclusions as you get older.  

Implementing a retirement saving strategy in your 50s

Man in his fifties looks wistful while sitting near a lake and canoe

In your 50s, you’re probably starting to dream of a comfortable retirement. And if your work life starts to wind down, you may need to think about how to maximise your superannuation.

  • Top up your super: Your priority is growing your retirement nest egg. Did you know you can contribute up to $27,500 each year from your pre-tax income.
  • Cut unnecessary expenses: Draw up a budget and consider where you could cutback to invest extra cash into your savings. For example, you may realise you can do without the daily coffee or the second car.
  • Put yourself first: We all want to take care of our kids and parents, but it’s important to stick to your savings strategy to keep your retirement plan on track.
  • Choose the right investments: As you move closer to retirement, your super investment mix shouldn’t be the same as it was in your 30s and 40s. Most funds let you choose from a range of investment options, from conservative to growth. MoneySmart has information on how to seek advice on investing through your super

Financial planning for retirement in your 60s

Couple in their sixties plans finances on a laptop

With retirement on the horizon, your 60s are the most important time to consider getting your retirement plan sorted and save as much money as possible.

  • Determine your retirement lifestyle: Think about what you actually want to do in your retirement, whether it’s volunteering, taking classes, or travelling. Knowing how you want to spend your retirement is just as important as having the money you need to achieve it.
  • Make a clear retirement plan: This involves working with a financial planner to set a specific date for your retirement, so you can focus on a super strategy to get you there.
  • Create an estate plan: Drawing up a will gives you peace of mind that your loved ones will always be looked after. You could also consider having funeral insurance to avoid leaving behind the stress of expensive funeral costs.
  • Consider downsizing: If you don’t need as much space, moving to a smaller home could free up some cash that you can use to boost your retirement savings.

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This article is an opinion only, provided for general information purposes and shouldn’t be considered or relied upon as professional or personal advice. If you have legal, tax, or financial questions, you should contact an appropriate professional.