Money Moves That Matter in Your 50s
Your 50s mark a crucial turning point—close enough to retirement that your decisions carry weight, but far enough out to still make a meaningful difference. This decade is about transforming what you’ve built into a secure, sustainable retirement. Here's how to make smart, impactful financial moves.
Rethink Your Mortgage Strategy
If you’ve been diligently making extra mortgage repayments, well done. But now is a good time to reassess whether that’s the best use of your money.
Superannuation (super) grows in a low-tax environment, and long-term returns can sometimes outpace mortgage interest rates. For example, while some super funds have historically delivered returns of 7–8% per annum, past performance is not a reliable indicator of future performance, and returns are not guaranteed. If your mortgage interest rate is lower, redirecting surplus cash into super through salary sacrifice may yield stronger long-term outcomes—depending on your individual situation.
With concessional (pre-tax) contributions taxed at 15%, compared to potentially much higher marginal tax rates, the savings can compound. A couple diverting $500 fortnightly from extra mortgage payments into super might be around $60,000 better off after 10 years—even if the mortgage isn’t fully repaid until retirement. This is a simplified illustration and does not account for your individual tax or financial situation.
This isn’t a universal rule. Offset accounts, cash flow needs, contribution caps, and your long-term goals all matter. A financial adviser can help you assess what’s best for your personal circumstances.
Boost Your Super with Concessional Contributions
Once you’ve freed up cash flow, super contributions should be top of mind. Concessional contributions—made via salary sacrifice or by claiming a tax deduction for personal contributions—are one of the most tax-efficient ways to grow your retirement savings.
For 2024–25, the annual cap is $30,000, including employer contributions. If you’ve had low contributions in recent years, you may be eligible to “catch up” using unused cap amounts from the past five years, provided your total super balance is below $500,000.
This can be especially useful if earlier years were financially stretched. However, keep in mind that funds in super are generally inaccessible until you meet a condition of release, usually at retirement. Taxation may also apply—higher-income earners may incur Division 293 tax, but even then, super remains a compelling long-term vehicle.
Review Your Super Investment Mix
Many people stick with their super fund’s default investment option, often without revisiting it for decades. But your investment strategy should reflect your goals, timeframe, and risk appetite.
Ask yourself:
Am I invested too conservatively (or aggressively) for my age and retirement goals?
When will I need to access this money?
Could I segment my super to better align with when funds will be used?
For instance, funds needed after age 70 may be suited to growth assets, while funds intended for early retirement years might be shifted to more stable options. This may help reduce the risk of having to sell during a downturn.
Some retirees explore a “bucket strategy” within super—allocating funds based on time horizons. Many super funds support this with features such as contribution direction or internal options. Suitability depends on your broader situation, so discuss these approaches with a financial adviser.
Audit Your Insurance
Insurance is often overlooked in your 50s—but costs rise, and your needs may shift. You could be paying for cover that’s no longer essential, especially if your mortgage is reduced and your children are financially independent.
Check:
What insurance do you have—life, TPD, income protection?
Is it held inside super? If so, is it being reviewed or reduced annually?
Are you paying more than necessary for declining benefits?
Before cancelling any cover, consider your health status and future insurability. Once a policy is cancelled, it can be hard to reinstate—especially if your health changes. It’s advisable to seek professional advice before changing insurance arrangements.
Visualise Your Retirement
Your 50s are the right time to map out what retirement looks like. Ask:
At what age do I want to stop working?
Will I travel, downsize, help my children, or pursue a passion project?
How much income will I need, and for how long?
Having these conversations with your partner can align expectations and reduce potential conflicts. One partner may want to keep working while the other is ready to retire. Shared planning now helps avoid stress later.
Also consider family responsibilities. Will your parents require care? Are your adult children still dependent? Your financial plan may need to accommodate multiple generations.
Take Care of Your Health
It’s hard to enjoy a long retirement without good health. Use this decade to schedule check-ups, track indicators like blood pressure and cholesterol, and complete age-appropriate screenings.
These choices may reduce future medical costs and improve your retirement lifestyle. While this article doesn’t offer health advice, maintaining wellbeing is just as important as financial preparation.
Final Thoughts
Your 50s offer a powerful opportunity to shape your retirement. With time still on your side and peak earning years in play, the decisions you make now can enhance your future lifestyle.
Key moves include:
Redirecting surplus cash from debt to super (where appropriate),
Maximising concessional contributions (especially with catch-up rules),
Aligning your investments with your time horizons,
Reviewing insurance for both coverage and cost, and
Defining your retirement goals with your partner.
This is a decade for action—not inertia. Consider seeking personal financial advice to ensure these strategies are suitable for your circumstances.
Disclaimer: This information is general in nature and does not constitute financial or tax advice. It has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on it, consider whether it is appropriate for your circumstances and seek professional advice from a licensed financial adviser or registered tax agent. Superannuation and taxation rules may change—refer to current legislation or official guidance.