People in their 50s are often juggling a number of financial responsibilities, from paying for kids’ tuition to caring for elderly parents — on top of saving for their looming retirement.

You might feel like your life, retirement savings and finances are set in stone at this age. But this mindset can be one of the biggest financial mistakes you make in your 50s, says Autumn Knutson, certified financial planner and founder of Styled Wealth.

“In your 50s, you still have sufficient, if not ample, time to make the changes you want to make for the life you either want now or the life you want in your future and for your 60s and 70s,” she says. 

Here are three smart decisions to make with your money in your 50s, according to three certified financial planners. 

1. Secure long-term care insurance

As you inch closer to retirement, your 50s are a good time to consider long-term care insurance, says Andrew Fincher, a CFP and financial advisor at VLP Financial Advisors.

Separate from health insurance and Medicare, long-term care insurance covers expenses that often arise in your later years, such as assisted living care and at-home care.

Long-term care insurance can help you tackle rising care costs — the median price of a private room in an assisted living facility was $64,200 per year, according to Genworth’s 2023 Cost of Care survey. Buying coverage now can also protect you from paying high premiums later. 

“Once you get to your 60s, [insurance companies] really jack up the premiums and it can be very costly,” says Fincher. “In your 50s, there’s a little bit more flexibility there to cover any cognitive disabilities. Having coverage on that can really help from hurting your spouse or your children.”

2. Try to increase your 401(k) contribution

With retirement approaching, try to add as much as you can to your 401(k) contribution, says Marguerita Cheng, a certified financial planner, CEO of Blue Ocean Global and member of CNBC’s Advisor Council. 

“Every January, increase your 401(k) contribution by 1%, if you’re not already maxing it out,” she says. 

A 55-year-old earning $80,000 per year could have an additional $16,779 in their retirement fund at 67 if they increase contributions by 1%, according to calculations from Fidelity Investments. That’s assuming an investment growth rate of 5.5%, consistent employment and a hypothetical salary growth rate of 4% a year.

“Don’t obsess over the past in the present [when] planning for the future,” says Cheng. “Now that you know these strategies, see if you can put any one of them into force, into action.”

3. Diversify your tax buckets

Use your 50s to begin adding money to a non-retirement investment account with a spouse or individually, says Joe Conroy, certified financial planner and author of “Decades & Decisions: Financial Planning At Any Age.”

Diversifying your investment accounts by adding money to a taxable brokerage account instead of keeping all your cash in tax-advantaged individual retirement accounts is a smart money move, says Conroy. That’s because every dollar that comes out of an IRA is taxed as ordinary income in retirement, while earnings on brokerage accounts are taxed at lower capital gains rates.

“The goal is not to retire with all of your money in IRAs,” Conroy says. “Your 50s are a perfect time to start adding money to a non-retirement account… Because it still leaves you time where you’re making money and you can actually have the cash flow and some time to put money in, let it grow, so it builds up in anticipation of retirement.”

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