1a4dc991888ce0266657218483d440f4 - Here’s How Much Money Experts Say You Should Have in Your Savings Account If You’re in Your 50s

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When it comes to retirement savings, hitting the age of 50 is a crucial milestone. At this point, the IRS allows individuals to make catch-up contributions to their tax-advantaged accounts. However, it’s essential to strike a balance between investing and maintaining a healthy emergency fund, especially considering financial responsibilities like supporting children, caring for aging parents, and rising healthcare costs.

A recent survey by GOBankingRates revealed that people in their 50s often have either very minimal savings or significant amounts saved up. For instance, 45% of individuals aged 45-54 have $100 or less, while 32% of those aged 55-64 have the same low amount. On the other end of the spectrum, 11% of the younger group and 25% of the older group have $10,000 or more saved.

However, there is no one-size-fits-all approach to determining the right amount of cash to keep in savings when turning 50. Gabriel Lalonde, CFP and president of MDL Financial Group, recommends having a solid emergency fund that covers three to six months’ worth of expenses. But once you reach 50, additional cash reserves should be set aside to provide stability and security in case of market volatility. Fulton Bank suggests adjusting your savings account to hold two to three years’ worth of expenses, considering the increased risk of setbacks as retirement nears.

Ultimately, the exact amount to allocate to savings depends on your risk tolerance and investment strategy, typically ranging from 5% to 20% of your overall portfolio. It’s essential to keep in mind the worst-case scenario and the consequences of not having sufficient savings, particularly during market downturns.

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