FINANCES IN YOUR 50s: crunch time

It’s crunch time for just about everyone at this age. Here are some suggestions:

The closer you get to retirement the more you need to dial back risk. A 50-50 split of stocks and fixed income investments while you’re in your 50s allows your retirement savings some room to grow while giving you a safety net of sorts. With the time approaching when you will need to draw on that money, having some measure of safety becomes an imperative for many people.

However, if you are behind in your savings, you may need to continue to be more aggressive as an investor to make up for lost time.

When you’re determining your asset allocation, consider all of your income, from pensions and elsewhere, to help determine how much risk is appropriate for you at this stage of your life.

- Firm up retirement options. This is the decade to think realistically about your retirement. "Decide what kind of lifestyle you want and plan accordingly," says one analyst. For example, if you will be dividing your time between two homes, you need to earmark savings for travel expenses.

- Continue saving for retirement.

With people living longer, everyone must continue to invest for their retirement.

- Calculate the high portfolio risk.

Don’t be too conservative, because you could still have a lot of life to live and inflation would eat away at your principal.

But don’t be overly aggressive because a lot of people had to go back to work because of their losses in the stock market, as has happened in the US. Staying on top of your portfolio at this time of your life is not a luxury but a necessity. "You must be diligent about visiting your financial planner once or twice a year. You really have to track your assets the closer you get to retirement," says another analyst.

- Build an emergency fund.

Some recommend a minimum of $6,000 in emergency savings, or three months of living expenses.

- Consider investments outside of the market. This will give your portfolio diversity. This might involve earning rental income.

- Take care of aging parents.

Deal with end-of-life issues, like where your parents want to live and how. Do they have a will? Are they covered for long-term illnesses? Find out how you fit into their future and what may be required of you emotionally and financially. Advance knowledge will help you prepare on both fronts.

- Downsize housing costs.

Consider selling your home for a smaller one or a condo. You can invest the proceeds toward retirement. A house can be a tremendous financial and physical responsibility.

- Stop giving to relatives/friends.

Find a way to wean them off you, because you may reach a point where you can no longer afford to lend a helping hand

- Explore long-term

care insurance.

If it makes sense, purchasing it in your 50s is a lot cheaper than at 70. Adjust life insurance. If husband and wife are both working, make sure each has adequate life insurance for what they would be responsible for during those earning years