Almost out of the clear blue there it was. The arrival of the big five-o. Fifty. Really? Yes, really. Looks like overnight I joined the ranks of other boomers turning 50.
Shocking to think that a full half century has gone by. But, good to know that my younger daughter has been gleefully keeping track of this milestone. One night at the dinner table she announced, “Guess what, Dad and Mom? You are going to be halfway to 100 on your next birthday! Boy, are you guys old!” Kids, aren’t they great?!
The positive spin for boomers turning 50
After the reality set in, I rather liked the positive potential. Fifty can seem older than it feels. And I don’t feel any different than I did at 35. So, to say that I’m only 50 percent of the way to my potential demise sounds pretty good!
At the same time, there was a definite change in my overall outlook. For boomers turning 50, we are now rapidly approaching key ages that affect our retirement and our lifestyle. There are only 15 more years until we reach 65 and become eligible for Medicare. Then there’s age 70 when we have to start our IRA minimum required distributions. That’s only 20 years away.
Turning our focus to the future
My husband and I have been busy building our careers, starting a business, raising wonderful daughters and so on for the past 30 years. So busy, in fact, that we never carved out sufficient time to do a thorough assessment of our finances. We’ve been saving all along, but where exactly are we? What do we have? What do we need to have? And, how on earth do we get there? How should we plan for this new phase of life?
We decided this was the year to focus on “planning for the next 50”. After looking at all the things we could be doing, we decided to concentrate on two major efforts. The first is renovating our house. The second is creating a more appropriate financial plan for this period in our lives. The two really had to work together. Since renovations require significant capital expenditures, what did that do to our retirement plans? If we are spending on big items now, what about tomorrow? So, here’s our approach for trying to make both goals work:
1. We pulled together our balance sheet.
Like most people, we have money in a variety of places for a variety of reasons. We have several retirement savings accounts, bank accounts, a few joint investment accounts, a mortgage, life insurance, and credit cards. I pay the bills and handle my individual investments. Dan pulls together our overall asset allocation strategy and does his own investing. We needed to see the overall picture of assets and liabilities.
It took a full day to pull together the various pieces. At the end of the day, it was very worthwhile to see how we were doing after nearly 30 years of saving and spending. Some of the items were surprising. For example, it’s likely we’ll have mortgage payments when we reach retirement. Some things were more delightful> We could see that when we combine all of our IRAs and 401(k)s, we had more money for retirement that we knew. It’s not enough, but it was more than we would have guessed. This balance sheet exercise gave us a solid picture of where we need to focus now as we think about the next decade and beyond.
2. We assessed our house for repairs and renovation.
One thing we found helpful was to walk through each room with a notebook and write down any work that needed to be done. This included minor things like painting, carpet cleaning, or replacing a broken screen. Plus we noted more extensive improvements such as new lighting, plumbing, or appliances.
Then, we totally changed gears and talked about where we want to live and when. With one daughter still in high school, we know we want to stay put for the next 3 years. But what about after that? Are we staying here forever? It is a difficult question to answer. So we broke the timeline down into 5-year increments. It’s a pretty safe bet that we will be here from 50 to 55. Beyond that we really weren’t sure.
With a practical time frame in place, we could now look at the renovation and repair list and see what we want to do sooner and what can wait. We did decide to replace appliances and put granite in the kitchen. We wanted to repaint most of the rooms and ceilings and add hardwood to the family room, but those would come next year. Overall, we figured out that we wanted to enjoy the improvements now while we are still living in the house.
Creating the plan took time
These tasks took longer than we thought. They required patience, listening to each other, and commitment to get it done. We didn’t rush any of the tasks, but scheduled more time to continue the discussion. After all, we seem to have plenty of years ahead of us.
We’ve got exciting things to do on our journey to 100. And, we’re just halfway there!
