Financial considerations for Australians over 50

Turning fifty changes how you see money, time and decide what really matters to you moving forward. No matter what you earn or how much you’ve saved, many Australians in their 50s reach a point where key financial considerations become a major focus.

If you’re in this busy decade, the choices you make now can significantly impact your retirement. That’s why it’s a good time to take stock and make thoughtful adjustments to help you live the life you want for years to come.

At First Financial, we help clients grow and protect their wealth so they can retire on their own terms. From making the most of super and savings to safeguarding what you’ve built and planning your legacy, these are some of the decisions that deserve careful thought at this point in your life.

While some people buy sports cars or book spontaneous holidays as part of a midlife crisis, a midlife financial check-up is a smarter way to mark the milestone. Start by putting together a personal balance sheet and listing your assets and liabilities just as a business would, then calculate your net worth. Look at the snapshot honestly. Does it reflect where you thought you’d be? Are there gaps, risks or debts that need addressing? This review should give you a solid foundation for decision-making.

If you need to, revisit your budget and cut back on any spending that doesn’t add real value to your life. Even small changes can free up money to put towards savings or investments. Choosing to live below your means now (while you’re likely in your peak earning years) can make a big difference later, and give you more freedom and confidence to enjoy life when work is no longer the priority.

Wiping out any debt before you retire can take a huge weight off your shoulders. Start with the highest interest rate debts, like credit cards or personal loans, and work your way down to longer-term obligations such as your mortgage. If you’re earning more in this stage of life, consider directing any surplus income toward paying down what you owe sooner, as it’s one of the most effective ways to improve your financial flexibility later on.

To plan for the retirement you want, you first need a clear picture of what that looks like. Think about what matters to you. Maybe it’s long overseas trips, regular dinners out, hobbies you’ve never had time for, or helping your family financially. Once you have that vision, work out your “magic number,” the amount you’ll need to fund that lifestyle comfortably. This figure isn’t one-size-fits-all, but having a target makes it much easier to stay on track.

Your 50s are often the best time to boost your retirement savings, especially with the tax advantages available through superannuation. If you can, consider adding extra to your super, whether by unused contribution caps or, if you’re eligible, making a downsizer contribution from the sale of your home. Even modest bonus amounts can compound surprisingly well over the next decade, while also giving you valuable tax benefits.

As retirement gets closer, it’s worth sitting down with a financial adviser to review how your money is invested both inside and outside super. Make sure your investments are well diversified and aligned with your risk tolerance. The right mix of assets can help your savings keep growing while also protecting you against market swings and inflation in the years ahead.

If you don’t have proper protection in place yet, now is the time to act. Many Australians are underinsured without realising it. In your 50s, review your life insurance, income protection and private health cover to make sure they meet your needs today. This protects your income and savings if illness, injury or other unexpected events occur.

As we get older, health issues tend to become more common. It’s wise to plan for future medical and living costs, including the possibility of aged care, as these can be significant. If you have elderly parents, keep in mind you may also need to support them with expenses or care, which can affect your own financial plans.

One of the simplest and most effective ways to protect yourself financially is to keep a healthy cash reserve. Having money set aside for unexpected expenses, whether it’s a major repair, a health issue or a sudden change in circumstances, means you’re less likely to dip into long-term savings or take on unnecessary debt.

Your 60s are next. How would you like them to look? And your 70s? Having a clear vision of the future will help guide the choices you make now. Do you want to retire early, or keep working beyond 65 because you genuinely enjoy what you do? This matters because retiring early often means a more aggressive savings plan, while working longer by choice usually allows for more flexibility in your finances.

Another important thing to think about in your 50s is whether your current home and expenses still suit your future plans. Many people choose to downsize at this stage, especially once the kids have moved out. A smaller, more manageable property can reduce maintenance and utility costs, and any profit from selling your home can be invested or added to your super under the downsizer rules. You might also consider moving closer to family and friends as you get older, or even switching to a lower-stress job to make the most of your remaining working years.

Finally, securing your legacy is an important step during this phase. Make sure you have an up-to-date will, and put in place powers of attorney and health directives so your wishes are clear. To transfer your assets in the most tax-effective way, it’s worth speaking with your financial adviser. Estate planning not only protects your family financially but also spares them extra stress during what will already be a difficult time.

Your 50s can be a financially empowering decade where you consolidate your wealth, address any vulnerabilities and map out the path to your ideal retirement. But remember, while these are general considerations, the right moves will depend on your personal circumstances.

Are you over 50 and contemplating what’s next? At First Financial, we can help you with a tailored plan that suits your life and goals. To learn more, contact a member of our team today.

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