If you’re a member of the Baby Boomer generation and getting ready to retire, it’s crucial to know the facts about subjects near and dear to oldsters’ hearts. That means learning the basics about things like investing in gold, using a home equity line of credit to pay for a child or grandchild’s college education, getting the most out of IRAs, navigating the complex Social Security laws, and making a big-picture plan for retirement. Of course, it’s wise to get professional help when constructing detailed financial plans.
Those in their late fifties need to take special precautions against scammers, who prefer to target those in that age group. Besides using online tools like anti-virus software, soon to be retirees should regularly change passwords on banking and investing platforms, avoid paying bills with a debit card, and review their credit scores regularly. Staying on top of your financial health and security is just as vital as monitoring your physical well-being as you age. Here are details about the most relevant things to know as retirement day approaches.
Myths About Gold Are Rampant
Online and on TV, there are numerous come-ons about the benefits of investing in precious metals and specifically the magical aspects of investing in gold. Most of the marketing efforts are geared toward middle-aged and older adults who are in the process of making decisions about where to park retirement money. Beware of the pitches because most omit highly pertinent facts. While gold can be a wise addition to a long-term portfolio, it is generally not a wise choice for older investors who have less time to wait for precious metals prices to rise substantially.
Homeowners Can Use HELOCs to Help Kids Pay for College
If you’re currently age 57 or older, then you are officially a Baby Boomer, according to the way the official demographic is defined. Chances are your children are well beyond college age, but that’s not necessarily the case. Older parents are getting close to 60 when their youngest is ready to enter college. You’re in luck if you own a home and have been paying the mortgage for several years. You can take out a home equity line of credit (HELOC) and use the money however you want.
Owners can leverage the power of their built-up equity to finance an education for their children, grandchildren, or a family friend. How to use the funds is up to you. The advantage of homeownership is that gaining access to low-interest funds is a quick and easy process. The paperwork is minimal, and owners can get cash relatively quickly. That’s a big plus for parents who want to meet early pay deadlines on tuition bills and take advantage of possible discounts.
You Can Add More to IRAs
Once you reach age 50, the IRS allows you to contribute more to individual retirement arrangements to catch up to financial goals. For 2023, each person can contribute $6,500 annually to an IRA. For those 50 and over, the catch-up provision raises the amount to $7,500 per year. Note that Roth IRAs use after tax earnings but are never taxed at withdrawal. Non-Roth accounts use per-tax income but do incur current tax rates upon withdrawal.