Turning 50 is awesome! After half a century of existence, there's much to celebrate! You have enjoyed your younger years, somehow figured out how life works, and amassed several life lessons. But, in your 50s, retirement is no longer a distant event, and you might be sitting on a heap of financial obligations. With an impending reduced income after retirement, you'll need a way to grow your money to continue meeting your financial responsibilities comfortably.
How To Grow Your Money In Your 50s
Here's how to approach building wealth by investing in your 50s:
Start paying down your debt
Set aside a ''rainy-day'' fund
Consider your pension
Maximize All Your Savings Options
Carefully Investing in Your 50s
Start with tackling debts that may be cutting into your current income. You want to avoid carrying your mortgage payments, student loans, car payments or credit card balances while headed into retirement. Your income will reduce once you've stopped working and managing debt with a higher income is easier. So, while you still have the time, work towards eliminating financial obligations that could stand in your way as you work to grow your money.
Nevertheless, when it comes to paying off debt, some rules apply. Before you start allocating money to your debt accounts, ensure that a significant deposit goes to your retirement accounts.
Pay your debts, starting with the ones with the highest interest, and as you pay them off, look for ways to make your other debts less expensive. For example, you could take out a debt consolidation loan that allows you to consolidate your costly loans into a single low-interest debt.
Before you start investing in your 50s, have an emergency fund that you can access easily in an easy-access savings account. Ideally, the fund should support your 3-6 months' worth of expenses. In your 50s and with family members likely still depending on you, there's a need for a contingency plan.
With your retirement coming up in a few years, you have an idea of how much you will receive in pension. Is this money enough to keep you comfortable in retirement, or would you like to add to it? If the pension is not enough, start paying into it to grow your money before retirement.
Your 401(k) or other employer-sponsored retirement plan is a good savings plan, but it's just one of several options you could take up. After maxing it out, shift to an individual retirement account (IRA). An IRA can help you grow your money for retirement through compounding, and this is much more than you would get with an investment account or a traditional savings account, even when you're not making contributions. In addition, it has numerous tax advantages, such as income tax-free or tax-deferred growth.
While it’s prudent to limit risk, putting all your money in savings accounts will not grow it. It gives you a sense of security, but it will be all you have. So, identify ventures that can grow your money with minimal risk.
Ease up towards conservative ventures. Aggressive ventures you would have taken up while in your 30s are no longer good for a 50-year-old because you are about to exit formal employment. Although conservative investments have reduced returns, you will have better insulation from market volatility.
It’s best to diversify your investment across asset classes. A conservative portfolio might comprise 60% bonds, 20% stocks, and 20% in money market funds. You can invest by yourself as a DIY investor but if you are worried and have no experience (although you can learn), seek help from major brokerages. They will help you sort through the investment options and advice based on expense ratio, performance, and other factors.
LendMeMoney.com Can Help You Grow Your Money In Your 50s
Your 50s usher in your golden years of retirement. You have raised a family and enjoyed a career that is nearly ending, and are now looking forward to slowing down, getting plenty of rest and mentoring the younger generations. But, even as you come to the close of your productive years, you can still do some final touches that could set you financially for the years to come.
You can grow your money by paying off your debts, having a contingency fund, and maximizing your savings. Investing in your 50s can also be lucrative, but stick to less risky investment options to keep your hard earned money intact. For more information and investment advice, contact LendMeMoney.com. We have the best investment offers.
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