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
Yes, you can invest in your 50s and 60s. In fact, it's a good idea to continue investing for as long as you are able, as this can help to grow your wealth and prepare for retirement.
Is age 50 too late to start investing? ›
If you're really kicking up your savings at age 50, chances are you're decently close to retirement. Because of this, some experts recommend choosing lower-risk investment options like bonds.
How should a 55 year old invest? ›
6 Steps to Consider Immediately If You're 55 With No Retirement Savings
- Calculate Your Expected Retirement Spending. ...
- Fund Your 401(k) to the Max. ...
- Open an IRA Immediately and Fund It. ...
- Utilize Catch-Up Contributions. ...
- Calculate How Much You'll Receive From Social Security. ...
- Find the Right Investments for the Next 10 Years.
By age 35, aim to save one to one-and-a-half times your current salary for retirement. By age 50, that goal is three-and-a-half to six times your salary. By age 60, your retirement savings goal may be six to 11-times your salary. Ranges increase with age to account for a wide variety of incomes and situations.
Is 65 too old to invest in stocks? ›
Investing for retirement is important at any age, but an individual's strategy may change at various life stages. Asset allocation by age helps build a sound retirement investing strategy. Younger investors can tolerate more risk, but they often have less income to invest.
Can I build wealth at 50? ›
Key takeaways. Building wealth in your 50s is all about refining where you invest and maximising both passive income and super contributions. It's not too late to set yourself up for a comfortable retirement. Still, being in your 50s does require more urgency in decades past.
Can I retire at 55 with no money? ›
Retiring with little to no money saved is not impossible, but it can present some challenges to your financial plan. Depending on where you're starting from, you may need to delay Social Security benefits, work longer, or drastically reduce expenses to retire with no money saved.
How much cash should I have at 55? ›
To figure out just how much money you need to save to retire by 55, Doe suggests using a common rule of thumb: Take your current salary and multiply it by 10. Keep in mind that this is just a jumping-off point — there are many other factors you'll need to consider.
What if you have no savings at 50? ›
Experts say you should have six times your salary saved for retirement by age 50. If you have $0 saved, immediately start automating contributions to a retirement account. It's not too late in life to invest in stocks to fuel your savings' growth.
How to retire at 62 with little 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.
Now, most financial advisors recommend that you have between five and six times your annual income in a 401(k) account or other retirement savings account by age 50. With continued growth over the rest of your working career, this amount should generally let you have enough in savings to retire comfortably by age 65.
Can I retire at 60 with 300k? ›
£300k in a pension isn't a huge amount to retire on at the fairly young age of 60, but it's possible for certain lifestyles depending on how your pension fund performs while you're retired and how much you need to live on.
Is 63 too old to start investing? ›
The point, though, is that it's never too late to start investing your money. And you certainly shouldn't assume that stocks are off the table, even if you're getting started later in life.
How much is $100 a month invested from 25 to 65? ›
$100 a month invested from age 25 to 65 is $1,176,000. You do NOT have to retire broke. A lot of people will want to argue with me on that rate of return. But here's the truth: Historically, the 30-year average return of the S&P 500 has been about 10–12%.
What age is too late to start investing? ›
Here's the real truth: It's never too late to start growing your money. And while time does matter when it comes to investing, it doesn't need to matter in the way you might think.
What is the best investment at the age of 50? ›
Ideally, 35-50% is an excellent number to save when you are 50. The entire amount can be put in mutual funds by way of Systematic Investment Plans (SIP). Also, mutual funds are a basket of stocks and other instruments. Thus, they offer good diversification of risk.
Should I invest at age 50? ›
Investing in your 40s & 50s. Having an investment portfolio in addition to your pension could be a good way to increase your preparation for retirement - whether you're planning to stop work completely or just cut back on your hours.
How much should a 50 year old have in growth investments? ›
In fact, according to retirement-plan provider Fidelity Investments, you should have 6 times your income saved by age 50 in order to leave the workforce at 67.
Should I start a 401k at 50? ›
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).
