Once you hit your 50s, you’re officially in crunch time for your retirement savings. If you’ve been neglecting your retirement goals for the last few years — or, you’ve fallen behind — now is the time to take action and get back on track.

But don’t let that scare you off.

You can still build up a comfortable nest egg thanks to a few key rules that benefit workers in their 50s. Here’s what you need to do:

1. Make Sure Your Goals Still Make Sense

Now is the time to take a hard look at your savings goals. Over time, increases in the cost of living could mean you need to have more saved by your last day than you originally thought.

A retirement calculator can help you see how much you’ll need to live comfortably based on your estimated savings and retirement age. But if you need help figuring out the best course of action, don’t hesitate to reach out to a fee-based certified financial planner. 

2. Check Your Asset Allocation

As you get closer to retirement, you’ll have fewer working years to recover from sudden dips in the market. Unexpected events like the Great Recession or COVID-19 can be particularly damaging to workers getting ready to retire.

To shield yourself from potential loss, experts recommend that you start shifting your allocations in this decade. If you have an aggressive approach, consider moving toward a more moderate or even conservative investment style. 

3. Take Advantage of Catch-Up Contributions

Have more to save? Now is the time to do it. Thanks to catch-up contributions, once you hit 50, you can contribute more of your pre-tax income to investment vehicles like your 401(k).

For 2020, you can contribute up to $26,000 — including a $6,500 catch-up amount. Since these savings lower your taxable income, it makes sense to contribute as much as you can. 

4. Stockpile Cash

Once you’re on track to reach your retirement contributions, make a plan to start putting more away in your rainy day fund.

Experts recommend having two to five years worth of liquidity in a high-yield savings account by the time you retire. That way, you can dip into those reserves if you need to and leave your investments alone to keep growing. 

5. Start Planning for Health Care Costs

As we age, our health care needs — and costs — increase. While beneficial, Medicare only covers around two-thirds of the costs for the average beneficiary. In fact, a 2019 study from the Employee Benefit Research Institute found that the average senior couple would need $325,000 to cover expected medical expenses.

If you’re eligible, consider opening a health savings account. Your contributions reduce your taxable income and your savings will grow over time. At 65, you can make withdrawals to cover medical costs, penalty and tax free.

Remember, while you’ve officially entered the crunch decade, you have this covered. By taking advantage of catch-up contributions and planning ahead, you’ll be well on your way to retiring comfortably. Next up, we’ll show you what to do once you hit your 60s and retirement is (finally) in sight.