You’re in your 50s or 60s, and you’ve not embarked on your investing journey yet. You’re reading about how investing can help you reach your financial goals, and the concept of making your money grow seems like an exciting prospect. However, with being that little bit closer to retirement, you might be worrying that you’re a bit late to the game and the investing ship has already sailed for you. But the truth is, it’s never too late. Investing is something that can benefit us at all stages of life, there might just be different considerations to take into account.
The importance of investing money when you’re older
When you reach your 50s and 60s and retirement is in sight, it immediately feels like the investing train has left the station. But there’s a number of reasons you should be investing as an older person.
1. You may live longer than you expect
The truth is, people are living longer which makes it crucial to invest your money. In the United States, for example, the average life expectancy has increased from about 70 years in the 1960s to about 79 years today. And many people live way beyond that. So if you retire in your 50s or 60s, it’s possible you’ll need money for 20 or 30 more years, and which current pension plans and savings might not cover. So investing your money will allow older people to stretch it as far as possible. A $100,000 nest egg that would only last a few years could work for itself and make excess to live off of for many years to come. So why wouldn’t you give your money the opportunity to grow?
2. Most investments are safe
When you’re older, you may associate investments with risk and volatility, which doesn’t seem like an alluring prospect when preserving capital and assets is at the forefront of your agenda. But not all investments are risky – in fact, there are a ton of safe investments out there. For example, dividend stocks generate regular income for the investor, which is perfect for older investors. You can also think about investing in more non-cyclical bonds – stocks that belong to vital consumer companies that are not as reactive to market movements than cyclical bonds. And let’s just say the thought of stocks all together doesn’t appeal to you, there are safer options such as bonds or actively managed funds, which could reduce the amount of stress you’re putting on yourself as you get older.
FAQs
It's never too late.
Is age 50 too late to start investing? ›
There's still time to put money into stocks
But the good thing about being in your 50s is that you're not necessarily on the cusp of retirement. You might conceivably be anywhere from 10 to almost 20 years away, depending on your specific age and retirement plans.
Is it too late to invest in your 60s? ›
(If you have additional questions about investing or retirement, this tool can help match you with potential advisors.) It's never too late to start investing, but starting in your late 60s will impact the options you have. Consider Social Security strategies, income sources and appropriate asset allocation.
What to do if you're 60 with no retirement savings? ›
Consider Part-Time Work
Income from part-time work coupled with your Social Security benefit could be all you need to live comfortably. It will certainly make your savings go further. More retirees are opting for this type of arrangement than have in previous generations.
Is it too late to start a 401k at age 50? ›
It is never too late to start saving money you will use in retirement. However, the older you get, the more constraints, like wanting to retire, or required minimum distributions (RMDs), will limit your options.
Can I start saving for retirement at 55? ›
If you are struggling to save, many employers offer financial wellness programs or other tools that can help with budgeting and basic finances. If you're age 50 or older, you can make catch-up contributions in both your workplace retirement plan and individual retirement account (IRA).
Is it too late to build wealth at 50? ›
It is Never Too Late to Build Wealth
And, the average age when people become millionaires is 58.5 for women and 59.3 for men according to a report from Fidelity investments. Don't ever think it is too late.
Is 52 too late to save for retirement? ›
If you didn't make saving for retirement a priority early in life, it's not too late to catch up. At age 50, you can start making extra contributions to your tax-sheltered retirement accounts (called catch-up contributions).
How to retire at 55 with no money? ›
If you determine you need more than Social Security income to meet your retirement needs, consider these options:
- Set a detailed budget to minimize expenses. ...
- Downsize your home. ...
- Continue working. ...
- Take advantage of tax-advantaged retirement plans. ...
- Open a traditional or Roth IRA.
According to this principle, individuals should hold a percentage of stocks equal to 100 minus their age. So, for a typical 60-year-old, 40% of the portfolio should be equities. The rest would comprise high-grade bonds, government debt, and other relatively safe assets.
Having no savings means that you will be forced to rely on your Social Security benefit for income in retirement. According to the Social Security Administration (SSA), among elderly Social Security beneficiaries, 12% of men and 15% of women rely on Social Security for 90% or more of their income.
How many 60 year olds have nothing saved for retirement? ›
About 27% of people who are 59 or older have no retirement savings, according to a new survey from financial services firm Credit Karma. To be sure, that's the same share as the overall population, yet boomers have less time to save for retirement given that the generation is now between the ages of 59 to 77 years old.
What do retirees do when they run out of money? ›
If you are already running out of money in retirement, consider part-time work, reverse mortgages, or financial assistance from family members or government programs.
How to start over at 50 with no money? ›
How to start over at 50 with no money
- Wait it out at your old job if possible. A paying job that you hate will still give you financial stability. ...
- Let go of the negative self-talk. ...
- Build the new you. ...
- Update your resume with transferable skills. ...
- Take free courses to improve your skills.
Depending on specific circ*mstances, workers over age 73 can still contribute to an IRA, a 401(k), and other retirement accounts.
What is the best investment after 50? ›
Some good investments for retirement are defined contribution plans, such as 401(k)s and 403(b)s, traditional IRAs and Roth IRAs, cash-value life insurance plans, and guaranteed income annuities.
What should a 50 year old invest in? ›
Also consider minimizing your exposure to higher-risk investments and instead invest more in stable stocks, government and investment-grade bonds, and cash. Review your investment portfolio with your Edward Jones financial advisor to make sure it still matches your life stage and long-term goals.
How much should a 50 year old have in growth investments? ›
Rowe Price analysis suggests that 45-year-olds should have three times their current income set aside for retirement. This savings benchmark rises to five times current income at age 50 and seven times current income at age 55.
Can you start over financially at 50? ›
When it comes to your financial life, the idea of starting over at 50 is daunting. Fortunately, that doesn't mean it isn't doable. With a bit of planning and dedication, you can get yourself on better financial footing regardless of your age.
Is it too late to be successful at 50? ›
You're never too old. Many of the world's most successful people didn't even start working on their dreams until their 50's or 60's. Check out these famous late bloomers in life that prove it's never too late to succeed in life. Whatever your dream is, it's never too late to achieve it.
