A third of Americans 55 and older have less than $10,000 saved for retirement. While that sounds like a scary statistic, there are ways to start investing after 50, and they can help you catch up, and live retirement the way you’re supposed too.
Assess Your Current Situation
A typical rule of thumb in the retirement world is that you will need 10 times the amount of money as your last full year’s worth of income from work (at least). So, if you made $40,000 in your last year of working, you’ll need $400k to retire comfortably.
Now, this is just the rule of thumb. When you’re investing after 50, that may not be practical. But at the very least, you can assess your current situation and know if you are on the right track, or if you have more work ahead of you.
Know What You’ll Need
The second part of investing after 50 is to know how much you can live off of. If 10 times the amount of your last year’s salary seems out of reach, could you live off of half of that?
Could you move to a country with lower costs, keep a part time job, or even sell your home and live in a cozy apartment? Knowing what you’ll need to live off of after retirement will be crucial in your decision making.
Play Catch Up
Did you know that after the age of 50, you can save more money in a 401k and IRA just because of your age? In 2017, investing after 50 meant that you could invest up to $24,000 into a 401k and another $6,500 in an IRA (remember that the new year may bring tax law changes, check here for more information. That’s $30,500 in just one year! Even if you don’t save all of that, it’s important to take advantage of the extra savings options.
You can also play catch up by making sure you’re out of debt, lowering your expenses (thus being able to save more money), and saving bonuses and raises that you may earn. Investing after 50 may be playing the catch-up game, but it can still be done!
Start Passive Income
Passive income is great for everyone, especially those investing after 50. Great passive income options include having rental properties, selling digital products (books, courses, etc.), and buying businesses like laundromats and car washes.
By building up your passive income, you’ll be able to supplement your retirement and social security income. Plus, this may help you if you’re unable to save enough to reach your retirement goal.
Use The Right Tools for Investing After 50
With a multitude of apps and websites, investing has never been easier. You can monitor your investing progress on various websites, invest extra money using apps, and even check on your estimated benefits with a social security calculator.
Using these tools not only helps you start investing after 50, but they allow you to take control of your money and watch it grow. So keep your spirits high and watch your money grow.
Hire An Expert
Even if you think a financial advisor or expert is too expensive, it may be worth it to see one anyways. Not only do they know the ins and outs of investing after 50, but they can also help you grow your money if you’re starting with very little.
Just make sure that you aren’t paying someone more money than you should be, and make sure they have your best interest at heart. While not all advisors work just for the money, there are a few that do. Don’t get taken advantage of.
Focus On You
Are you still trying to put your kids through college, take care of your grandkids, and spending money on family members? Stop! Your life is yours, and you should be prepared to live it to the fullest after retirement.
No one wants to see their child struggle, but you may be doing yourself a disservice if you are focusing on making the best life for them and not yourself. Will your child let you move in with them and will they take care of you for the rest of your life? Probably not. So set yourself up for success now and focus on you.
Investing after 50 doesn’t have to be difficult, and it is possible to save up for retirement in a short amount of time. Don’t be afraid to play catch up, and remember that retirement is right around the corner.
