5 Ways To Build Wealth in Your 50s
Written by
Martin Dasko
Edited by
Amber Barkley
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How you approach building wealth and planning for the future should change with age. As you get older, you want to ensure that you’re making the right moves to enjoy your retirement and not have to stress about paying the bills. Here’s a review of how you can approach wealth building when you reach your 50s.
Pay Down Your Debt
If you want to get serious about building wealth, you have to start by paying off your debt. Once you pay off your debt, you can focus on allocating all your funds toward investing in your future.
As you reach your 50s, it’s critical that you get aggressive about paying off your debt, because you don’t want to burden your future self with additional expenses. The money that you spend on debt payments and interest will take funds away from planning for your future.
Watch Your Expenses
You should look for non-essential expenses that could hold you back from saving in your 50s, and review your finances regularly to ensure that you’re not missing opportunities to invest in your retirement nest egg.
Here are examples of expenses you want to review in your 50s:
- Discretionary spending on dining out
- Subscriptions you may have forgotten about
- Services you no longer use
- Consider cutting off financial support for your adult children.
As you approach retirement, you should focus on investing in your future so that you can enjoy your lifestyle once you leave the workforce. Every dollar you save now can go a long way toward helping you with your retirement income.
Maximize Retirement Contributions
“Exploring ways to increase your contributions to your retirement accounts, such as 401(k)s, IRAs or other retirement accounts, is crucial,” said Chad Gammon, financial planner at Arnold & Mote Wealth Management.
You want to do whatever you can to maximize your retirement contributions in your 50s so that you’re investing as much as you can while still having compound interest on your side.
“For individuals aged 50 and above, there’s a unique advantage available, called a ‘catch-up’ contribution,” noted Gammon. “It’s a great way to bolster your retirement savings.”
You want to take advantage of all opportunities to fund your retirement accounts, so you don’t have to stress about paying bills when you’re older. If you neglected your savings in the past, you can start catching up right now.
Create a Retirement Plan
“This is a pivotal step towards meeting your future financial goals,” said Gammon.
If you’re in your 50s, you have to make retirement planning a priority, since you’re close to leaving the workforce. You have two options for retirement planning:
- Create your own plan. There are many resources and tools available if you want to be in control of your own plan.
- Work with a professional. You can work with a financial planner, who will help you create a plan based on your situation.
“A valuable resource for finding trustworthy advisors is the National Association of Personal Finance Advisors,” Gammon said. “This platform connects you with fee-only fiduciary advisors committed to acting in your best interest.”
Whatever you decide, the goal is to create a retirement plan based on your current financial situation and when you want to leave your job.
Invest in Yourself
“Investing in yourself is a broad spectrum of opportunities in your 50s,” noted Gammon.
If you just entered your 50s, you can still invest in yourself and maximize your time. There are a few pivotal ways you can invest in yourself in your 50s:
Investing in Your Earning Potential
“This investment could be financial, by seeking out educational or training opportunities to boost your earning potential,” said Gammon.
You could upgrade your skills at work or look into new skills that you can acquire to increase your income so that you have more money to allocate toward retirement planning.
Investing in Your Health
“Engaging in activities like joining a gym or using the services of a personal trainer can significantly improve your well-being, Gammon said. “That way, you can fully enjoy your retirement years.”
As critical as it is that you build wealth, you want to ensure that you’re around to enjoy your money. You want to invest in your health to improve your quality of life as you age.
Investing in Social Connections
“Seeking opportunities to meet new people and meaningful relationships can help [you] prepare for a fulfilling retirement,” said Gammon.
By investing in your connections, you’ll be able to meet new friends and have something to look forward to as you prepare to leave your job.
Closing Thoughts
Gammon concluded, “Building wealth in your 50s is typically a golden time. You may have raised a family and [are] empty-nesting — or close to it. You settled into a career and could be making more money than any other time in your life. Now is a great time to put some extra effort into your retirement planning.”
If you’re in your 50s, you may have to focus more on planning for retirement when it comes to building wealth, because you want to feel confident about your financial situation when you’re out of the workforce.
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