8 ‘Late Start’ Retirement Tips — Go From Broke in Your 40s To a Millionaire in Your 50s
Written by
Laura Beck
Edited by
Amber Barkley
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Do you think it’s too late to retire rich if you haven’t started saving for retirement by your 40s? Think again, because your nest egg still has potential.
With focused effort, it’s possible to go from financially strapped to millionaire status within a decade or so without necessarily having to work longer. Take entrepreneur Courtney Robinson, for instance, who was featured in an interview on the “BiggerPockets” Money podcast and YouTube channel. In her interview, Robinson shared her journey from financial struggle to financial security.
She grew up with a frugal lifestyle and remained committed to it throughout her life, opting for older cars, home-cooked meals and matinee movies. Of course, as her family expanded, maintaining this lifestyle became increasingly challenging, especially when it came to boosting her retirement savings.
However, Robinson was able to get herself on track with a few tips and tricks she shared on the podcast. Here’s how she did it, and how you can too.
Scrutinize Your Budget and Cut Costs
First thing’s first: Take an honest look at where your money is going each month and whether your spending habits are on track with your retirement goals.
You can do this through identifying which expense categories are needs — like food, housing and transportation — and which are wants — like dining out, vacations and hobbies. Your goal moving forward should be to prioritize spending on your needs and reduce spending on your wants.
As Robinson said on the podcast, her husband “realizing needs before wants was the biggest impact.” Recognizing essentials versus luxuries allows you to divert more cash to savings and investments.
Grow Your Income
You can boost your earnings by negotiating raises, finding a higher-paying job, monetizing skills into side gigs for passive income or starting a business. Robinson worked constantly, “28 days a month” according to her interview, but she increased her income from $15,000 to $57,000 in just four years.
She continued, saying, “I owned a yoga school, [and] I was always happy just making [grocery money].”
However, Robinson was thrilled the business continued to expand and grow to make more and more money. Essentially, she was able to leverage her skills to generate a larger income even after age 50. Once your needs are met, a boost to your income will allow you to invest in the future through 401(k) plans, traditional IRAs, Roth IRAs and more.
Pay Off High-Interest Debt First
It’s a good idea to attack your credit card balances first to avoid wasting money on interest. Robinson made sure to pay the $11,000 in credit card debt she owed as well as other obligations she inherited after her divorce.
The bottom line is that many experts agree that eliminating debt can provide direct cash flow to your retirement savings.
Invest Often
In her interview, Robinson explained that her husband had only $48,000 saved at 50, but he consistently invested in retirement accounts. Even small investments will enjoy the benefits of compound interest, and the earlier you start, the more money you could earn.
As an old Chinese proverb says, “The best time to plant a tree was 20 years ago. The second-best time is now.”
Leverage Real Estate
Investing in real estate isn’t easy, but it can be very lucrative. Robinson bought rural land and built a cabin there that she rents on Airbnb, creating additional income. She also strategically bought and sold a home for a profit.
Potential investors know that real estate appreciation and income can significantly boost your net worth. Robert Kiyosaki, well-known investor and personal finance author, once said, “90% of all millionaires become so through owning real estate.”
Embrace Frugality
Robinson took pride in her frugal lifestyle. She said, “I would rather be rich than look rich.”
Because of this, she drove her husband around in a used truck, bought whatever she could in bulk and completed her own projects instead of hiring out. By adopting an anti-consumerist, frugal mindset, Robinson was able to keep her spending low, leaving more funds for investing.
Embrace Entrepreneurship
In the interview, Robinson explained that her husband ran multiple side businesses in construction and martial arts to generate extra income.
An entrepreneurial spirit like his can uncover opportunities for both cash flow and fulfillment. And if you’re able to increase your income (and thereby your savings) now, you won’t have to worry as much about the state of Social Security when you retire.
Take cues from billionaire entrepreneur, Mark Cuban, who said, “The number one reason people fail in life is because they listen to their friends, family and neighbors.”
Relocate To Save
Sometimes, moving to a lower-cost area can drastically reduce your living expenses and potentially give you the opportunity to save and invest more
For example, Robinson resides in rural Arkansas where a decent lifestyle costs far less than in coastal cities. Her frugal lifestyle totaled around $40,000 annually, largely thanks to Arkansas’ low prices.
Final Take To GO
While becoming a millionaire after 40 requires effort and sacrifice, it’s possible to do so in less than a decade through smart budgeting, higher earnings, disciplined saving and calculated risk-taking.
Robinson and her husband reached seven figures in just 10 years, proving that with persistence, savvy money moves can help anyone achieve “late start” retirement success.
Caitlyn Moorhead contributed to the reporting for this article.
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