5 Financial Wellness Steps Every Person Over 50 Should Take Now

Planning your financial future after 50 feels like standing at the base of a mountain, deciding whether to take the well-worn tourist path or forge your own route through unfamiliar terrain. The established trail offers comfort and predictability, but the choice path might reveal hidden waterfalls and stunning vistas that most people never see.

Your financial life operates the same way. You could follow the standard advice about saving more and spending less, but genuine financial wellness at this stage requires digging deeper than conventional wisdom suggests.

You can improve your financial situation over the next 12 months by taking the 5 financial wellness steps every person over 50 should know, and most people overlook. You must approach this systematically, addressing both the obvious money matters and the bigger structural changes that create lasting security.

Without this comprehensive approach, you’ll perpetually worry about retirement, constantly second-guess your decisions, and never achieve the peace of mind you deserve.

Financial wellness after 50 centers on creating a comprehensive system that addresses healthcare uncertainties, generates reliable income, protects your legacy, honors your values, and gives you freedom to live purposefully. Money alone won’t solve these challenges.

I’m walking you through five essential steps that go beyond typical retirement advice. These are actionable strategies that address the real challenges you’re facing right now, not theoretical concepts that sound good on paper.

1. Create a Healthcare Cost Projection System

Most people over 50 seriously underestimate their actual healthcare costs in retirement. I’ve watched countless people meticulously plan their retirement income while completely overlooking the fact that a 65-year-old couple retiring today will need about $315,000 just to cover healthcare expenses throughout retirement.

That figure excludes long-term care, which can easily add another $150,000 to $300,000 to the total.

The problem stems from treating healthcare as a vague future concern rather than building a detailed projection system that accounts for the specific realities you’ll face. People know healthcare is expensive, but knowing and planning are entirely different things.

You need to understand the exact costs of Medicare Part B premiums, which in 2024 start at $174.70 monthly but increase based on your income. If you’re still working or have significant retirement income, you could be paying substantially more through Income-Related Monthly Adjustment Amounts.

These aren’t small increases either – they can more than double your premium costs.

Then there’s Part D prescription drug coverage, which varies wildly depending on the medications you take. The average monthly premium hovers around $55, but if you take several brand-name medications, your out-of-pocket costs could reach thousands annually even with coverage.

I’ve seen people shocked when their medication expenses alone consume $4,000 to $6,000 per year despite having insurance.

Medigap policies that fill the gaps in Original Medicare typically cost between $150 and $400 monthly, depending on your location and the plan you choose. These supplemental plans make a huge difference in protecting you from catastrophic out-of-pocket expenses, but they represent another high monthly cost that many people fail to budget for.

The coverage gap between retirement and Medicare eligibility at 65 catches people completely off guard. If you retire at 62, you’ll need private health insurance for three full years.

COBRA coverage from your former employer might be available, but it’s prohibitively expensive because you’ll be paying the full premium plus an administrative fee.

I’ve seen COBRA premiums exceeding $1,500 monthly for individual coverage and $2,500 for family coverage.

Marketplace plans under the Affordable Care Act offer more affordable options, especially if you qualify for subsidies based on your retirement income. The key here involves strategic income management during those gap years to maximize subsidy eligibility while minimizing tax liability.

The strategic approach requires creating a year-by-year projection from your current age through age 90 or beyond. For each year, estimate your premium costs, likely out-of-pocket expenses based on your health conditions, and potential catastrophic costs.

This exercise forces you to confront reality rather than hope everything works out somehow.

I recommend setting up a dedicated healthcare savings bucket separate from your general retirement funds. If you’re still working, maximize contributions to a Health Savings Account, which offers triple tax advantages.

Your contributions are tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses are tax-free.

That’s better than a 401(k) or IRA, which only offers tax benefits on one end of the transaction.

After age 65, you can withdraw HSA funds for any purpose without penalty, though you’ll pay ordinary income tax on non-medical withdrawals. This flexibility makes an HSA function like a super-charged retirement account that you can use for healthcare or general expenses.

The real power of this system comes from eliminating vague anxiety about healthcare costs and replacing it with concrete numbers you can plan around. You’ll know exactly how much you need to set aside, which investment vehicles to use, and how to structure your coverage transitions.

This clarity alone reduces enormous retirement stress.

2. Build Multiple Income Streams Before You Need Them

The traditional model of retirement income relied heavily on three sources: Social Security, a pension, and personal savings. That three-legged stool has become increasingly unstable as pension plans disappear and Social Security replaces a smaller percentage of pre-retirement income.

The average Social Security benefit in 2024 was roughly $1,907 per month, or about $22,884 per year. That won’t maintain most people’s desired lifestyle, especially when you factor in healthcare costs, inflation, and the rising cost of everything from groceries to utilities.

People who thrive financially after 50 aren’t necessarily those with the highest incomes during their peak earning years. They’re the ones who systematically built several income streams well before they needed them.

This diversification creates resilience against market volatility, inflation, and unexpected expenses.

The first income stream to improve is Social Security. Your claiming decision represents one of the most consequential financial choices you’ll make.

If you claim at 62, your benefit is permanently reduced by roughly 30 percent compared to your full retirement age benefit.

If you wait until 70, you receive an extra 24 percent beyond your full retirement age amount.

For someone with a full retirement age benefit of $2,000 monthly, that’s the difference between $1,400 at 62 and $2,480 at 70. Over a 25-year retirement, that delay creates about $324,000 in extra lifetime benefits.

The mathematics strongly favor delaying, but only if you have other income sources to bridge the gap.

Dividend-paying stocks in established companies can generate quarterly income without requiring you to sell shares. A portfolio of $500,000 yielding 3 percent annually produces $15,000 in dividend income.

Companies like Johnson & Johnson, Procter & Gamble, and Coca-Cola have increased dividends consistently for decades, providing some inflation protection.

These companies aren’t going anywhere, and they reward shareholders who stick with them.

Bond ladders create predictable income streams with defined maturity dates. Instead of buying a single bond, you purchase bonds maturing in sequential years.

As each bond matures, you reinvest the principal into a new long-term bond at the end of your ladder.

This strategy provides regular income while maintaining principal and reducing interest rate risk. When rates rise, you’re constantly rolling into higher-yielding bonds.

When rates fall, you’re protected by the longer-duration bonds locked in at higher rates.

Real estate can generate substantial passive income if approached strategically. I’m not suggesting you become a landlord dealing with midnight maintenance calls.

Instead, consider house hacking if you have extra space and rent out a portion of your home.

Or invest in Real Estate Investment Trusts, which are companies that own income-producing real estate and must distribute 90 percent of taxable income to shareholders as dividends. REITs give you real estate exposure without the hassles of property management.

What really sets people up for success is creating income from knowledge and skills rather than just financial assets. If you’ve spent decades developing expertise in accounting, project management, writing, consulting, or any professional skill, you can monetize that knowledge through part-time work, freelancing, or teaching.

The gig economy has made this remarkably accessible. Platforms connect experienced professionals with companies needing short-term expertise.

Former corporate executives can earn $50,000 to $100,000 annually by working 20 hours per week on projects they find interesting, while maintaining the flexibility to finish on time.

The timing element here matters tremendously. You need to establish these streams while you’re still working full-time.

Building a freelance client base takes time.

Learning to manage rental properties requires experience. Developing a dividend portfolio needs years of contributions.

If you wait until you retire to start building alternative income sources, you’ll be operating from a position of financial stress rather than strategic choice.

Some people successfully transition into part-time roles that pay $30,000 to $50,000 annually, offering flexibility and purpose. That extra income, combined with optimized Social Security and investment income, creates a comfortable lifestyle without depleting principal funds.

You maintain your capital base while living off the income it generates – that’s the definition of financial independence.

3. Eliminate Debt with Laser Focus

Entering retirement without debt obligations hanging over you brings profound liberation. The mathematics are straightforward.

Every dollar you owe must be repaid with interest from your fixed retirement income.

Yet according to recent data, the average household headed by someone age 55 to 64 carries roughly $87,000 in debt, including mortgages, car loans, and credit cards.

The conventional advice is to pay off debt slowly while investing for higher returns. The logic seems sound on the surface.

If you’re earning 8 percent on investments while paying 4 percent on a mortgage, you come out ahead mathematically.

But this purely numerical analysis ignores the psychological burden of debt and the certainty of required payments versus the uncertainty of investment returns.

There’s a spiritual dimension to debt elimination that goes beyond mathematics. Scripture consistently warns about the dangers of debt, describing the borrower as a servant to the lender.

That’s a recognition that debt constrains your choices and creates ongoing obligations that limit your freedom.

When you owe money, you serve the lender’s timeline and terms, not your own priorities.

The strategy I recommend involves an aggressive, focused debt elimination plan that treats debt payoff as your primary investment for a defined period. This doesn’t mean you stop all retirement contributions, especially if you’re receiving an employer match.

That’s free money you shouldn’t leave on the table.

But beyond capturing the match, redirect most resources toward eliminating debt.

Start by listing every debt you owe, including the balance, interest rate, and minimum payment. You’ll use either the debt avalanche method, where you pay off the highest interest rate debts first, or the debt snowball method, where you pay off the smallest balances first, regardless of interest rate.

The avalanche method is mathematically optimal, saving you more in interest. The snowball method provides psychological wins through quick victories.

Both methods need you to make minimum payments on all debts while directing every extra dollar toward your target debt.

Once that’s eliminated, you roll that entire payment into the next debt on your list. The amount you can direct toward debt elimination grows like a snowball rolling downhill, gaining momentum as each obligation disappears.

What makes this particularly powerful after 50 is that you’re likely in your peak earning years. Your kids may have finished college.

Your career is established. You have the income capacity to make serious progress if you choose to prioritize debt elimination over lifestyle expansion.

Temporarily living below your means to eliminate debt creates a permanent financial margin.

The mortgage decision deserves special attention. Many financial advisors recommend keeping a mortgage in retirement because of the tax deduction and low interest rates.

But tax deductions only matter if you itemize, and most retirees take the standard deduction.

The peace of mind from owning your home outright is difficult to quantify but incredibly valuable.

Your required monthly income drops substantially when you eliminate a mortgage payment of $1,500 to $2,500. I’ve seen people speed up mortgage payoff by making one extra payment each year, which can shave years off a 30-year mortgage.

Others refinance to a 15-year mortgage, accepting a higher monthly payment in exchange for dramatically reduced total interest.

Some make biweekly payments instead of monthly payments, resulting in 13 full payments per year instead of 12.

The goal is to create a financial structure that aligns with biblical principles of stewardship while providing genuine peace of mind. When you enter retirement debt-free, your income requirements drop dramatically.

You gain flexibility to reduce working hours, pursue meaningful activities, and weather economic downturns without constant financial anxiety.

4. Establish Estate Planning Documents That Reflect Your Values

Most people think estate planning means distributing assets after death. That’s certainly part of it, but the more immediate value comes from documents that protect you during life and ensure your values guide decisions if you become incapacitated. After 50, these documents shift from theoretical to practical necessity.

The core documents everyone needs include a will, a healthcare proxy, a durable power of attorney, and, ideally, a living trust. Each serves distinct purposes.

Your will specifies how assets should be distributed and names guardians for minor children if applicable.

A healthcare proxy designates someone to make medical decisions if you’re unable. A durable power of attorney authorizes someone to handle financial matters if you’re incapacitated. A living trust holds your assets during your lifetime and distributes them according to your wishes, avoiding probate.

Estate planning from a faith perspective represents an act of stewardship and love. You’re taking responsibility for resources God has entrusted to you and ensuring they’re used according to His principles even after you’re gone.

You’re sparing your family the burden of making difficult decisions during emotionally charged times.

You’re creating opportunities to support Kingdom work through charitable giving.

The strategic element that most people miss involves beneficiary designations. These override your will for retirement accounts, life insurance, and payable-on-death accounts.

I’ve seen families torn apart because someone updated their will but never changed beneficiary designations on a $400,000 IRA, leaving everything to an ex-spouse instead of current family members.

You need to review every account annually and ensure beneficiaries reflect your current wishes. For retirement accounts, you’ll typically name a primary beneficiary and one or more contingent beneficiaries.

The primary receives assets if they survive you.

Contingents receive assets if the primary has predeceased you. This seems simple, but the tax implications are complex, especially with inherited IRAs after recent law changes.

Charitable giving deserves intentional planning rather than being treated as an afterthought. To support ministries, churches, or nonprofits, there are tax-advantaged strategies that benefit both you and the organizations.

Qualified Charitable Distributions allow people over 70½ to donate up to $100,000 annually from IRAs directly to charities without counting as taxable income.

This satisfies Required Minimum Distributions while reducing tax liability.

Donor-advised funds let you make a large charitable contribution in a high-income year, take an immediate tax deduction, then distribute funds to charities over many years. You get the tax benefit upfront while maintaining flexibility in grant timing and recipients.

For people with concentrated stock positions, donating appreciated securities lets you remove the full market value while avoiding the capital gains tax you’d pay if you sold the stock first. If you bought Apple stock for $10,000 that’s now worth $50,000, donating the shares gives you a $50,000 deduction and eliminates the $40,000 capital gain you’d otherwise owe taxes on.

The living trust component becomes increasingly important after 50 because it avoids probate, maintains privacy, and provides continuity if you become incapacitated. Probate is the court-supervised process of distributing assets after death. It’s public, expensive, and time-consuming, often taking 12 to 18 months.

A properly funded living trust allows assets to be transferred to beneficiaries within weeks rather than months.

Funding the trust means retitling assets in the trust’s name. Your home, investment accounts, and bank accounts should be owned by the trust.

This requires paperwork and coordination with financial institutions, but it’s not complicated. Life insurance and retirement accounts typically shouldn’t be owned by the trust, but should name the trust as beneficiary in specific circumstances.

The practical step here is to schedule time with an estate planning attorney who understands your values. Come prepared with a final list of assets, current beneficiary designations, and a clear sense of your goals.

To ensure adult children receive equal inheritances, specify that.

To support one child with special needs differently, structure provisions accordingly. If Kingdom work is central to your values, incorporate charitable giving into your plan.

Review and update these documents every 3 to 5 years, or after major life changes such as marriages, divorces, births, deaths, or significant changes in assets. Laws change, too.

The Tax Cuts and Jobs Act of 2017 dramatically increased estate tax exemptions, meaning far fewer estates owe federal estate tax.

But state estate taxes vary widely, and future law changes could reduce exemptions again.

5. Design a Purpose-Driven Financial Lifestyle

The final step might seem less concrete than the others, but it’s actually the foundation that makes everything else meaningful. You can improve every financial strategy, maximize every tax advantage, and accumulate substantial wealth, but if you don’t have clarity about why you’re doing it, you’ll never feel financially secure, no matter how much you have.

I’ve noticed a pattern among people who feel genuinely wealthy regardless of net worth. They’ve defined what ‘enough’ means to them personally.

They’ve aligned their financial decisions with their deepest values.

They’ve designed a lifestyle that brings satisfaction without requiring constant increases in spending. Most importantly, they’ve connected their financial resources to purposes larger than personal consumption.

This requires wrestling with questions most people avoid. What do you actually need to live well?

Not what your neighbors have or what social media suggests you should want, but what brings you genuine contentment and peace.

What purposes beyond yourself do you want to support with your resources? What legacy do you want to leave, not just in assets but in values and impact?

From a Christian perspective, this involves stewardship rather than ownership. The resources you control don’t ultimately belong to you.

They’re entrusted to you temporarily for purposes that extend beyond personal pleasure.

This mindset shift changes everything about how you approach financial decisions. You’re managing resources for Kingdom purposes, not just accumulating for yourself.

The practical application involves creating what I call a Purpose-Driven Spending Plan. This means a proactive allocation system that directs funds toward what matters while eliminating spending on what doesn’t.

It’s not a restrictive budget that makes you feel guilty about every purchase.

Start by tracking spending for two to three months without judgment. Just collect data on where money actually goes.

Most people are shocked by this exercise.

They uncover they’re spending hundreds monthly on subscriptions they barely use, food that gets thrown away, and impulse purchases that provide momentary pleasure but no lasting value.

Next, categorize spending into three buckets: essentials that maintain your basic quality of life, enhancements that bring genuine joy and meaning, and waste that provides little value. Be ruthlessly honest.

That premium cable package you rarely watch is probably a waste of money.

The monthly coffee shop visits with a close friend might be an enhancement worth preserving.

Now design your ideal allocation. How much do you want directed toward essentials like housing, food, and healthcare?

How much toward meaningful enhancements like travel, hobbies, and experiences with family?

How much toward saving and investing for future needs? How much of that giving reflects your values?

The percentages matter less than the intentionality. Some people thrive on 50 percent essentials, 30 percent enhancements, 10 percent savings, and 10 percent giving.

Others prefer 40 percent essentials, 20 percent enhancements, 30 percent savings, and 10 percent giving.

The right allocation is whatever aligns with your values and goals.

What makes this powerful after 50 is that you have decades of experience with what brings lasting satisfaction versus temporary pleasure. You’ve likely realized that most material purchases provide diminishing returns.

The second luxury car doesn’t bring twice the happiness of the first.

The bigger house often brings more stress than joy. The latest gadgets lose their appeal within weeks.

Research consistently shows that spending on experiences rather than things produces greater lasting happiness. A two-week trip creates memories and stories you’ll treasure for decades.

A new television becomes background noise within months.

Spending on others through generosity produces more satisfaction than spending on yourself. Investing in relationships through shared meals and activities builds social connections that are basic to wellbeing.

I recommend building Strategic Generosity into your financial plan. This means you designate specific amounts monthly or annually for purposeful giving, rather than responding randomly to requests.

You identify causes and organizations that align with your values and consistently support them.

You look for opportunities to be generous in ways that multiply impact.

This might mean supporting a missionary family monthly, contributing to your church’s building fund, helping young families with educational expenses, or funding microloans in developing countries. The specific causes matter less than the intentionality and consistency.

Planned generosity tends to be more substantial and sustainable than spontaneous giving.

The retirement transition offers a unique opportunity to redesign your lifestyle around purpose rather than productivity. Many people struggle with retirement because they built their identity around career accomplishments and workplace relationships.

When those disappear, they feel lost and purposeless.

But if you’ve been cultivating interests, relationships, and causes beyond work, retirement becomes a liberation rather than a loss.

Consider how you want to invest your time in the next season. What skills and knowledge could you share with younger people?

What community needs could you help address?

What creative pursuits have you postponed while working? What relationships deserve more investment?

What places do you want to explore?

What spiritual disciplines do you want to deepen?

Your financial planning should support these pursuits rather than exist separately from them. To volunteer extensively with a nonprofit, your income needs are lower than if you plan to travel internationally regularly.

To start a small business or ministry, you’ll need startup capital and a runway to cover initial losses.

To support grandchildren’s education, you’ll need surplus income or dedicated savings.

The exercise I recommend involves creating a detailed vision for your next season that addresses how you’ll spend your time, what activities will provide meaning, how you’ll maintain social connections, and what purposes you’ll pursue. Then build a financial structure that makes that vision possible.

This reverses the typical approach in which people accumulate money without a clear purpose, then struggle to figure out what to do with their retirement.

Key Takeaways:

Healthcare cost projection systems eliminate anxiety by replacing vague worry with concrete planning numbers from age 65 through age 90 and beyond.

Multiple income streams built before you need them create resilience against market volatility, inflation shocks, and unexpected expenses while enabling Social Security optimization.

Aggressive debt elimination before retirement provides psychological freedom and dramatically reduces required monthly income, creating financial margin and peace.

Estate planning documents protect you during life through healthcare proxies and powers of attorney while ensuring your values guide asset distribution and charitable giving.

Purpose-driven financial lifestyle design connects resources to meaning beyond personal consumption, creating satisfaction regardless of net worth through intentional allocation and strategic generosity.