Is it Too Late To Start Investing in Your 50s and 60s? (2024)

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Is it Too Late To Start Investing in Your 50s and 60s? ›

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.

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Experts say even in your 50s, it's not too late to take steps to get in better financial shape.

It's never too late to start investing and managing your money. But I don't want to sugarcoat it. If you're planning to invest for retirement, getting the ball rolling in your late 60s certainly limits your options. So, let's discuss some of your choices.

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.

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. If you're not reaching these benchmarks, it's okay.

Catching up on retirement savings at 55 with a 401(k) plan is a good idea, given the numerous benefits that this approach brings, including: High contribution limits: Compared to IRA distributions, 401(k) plans have higher deferral limits of up to $22,500 in 2023.

Some good investments for retirement are defined contribution plans, such as 401(k)s and 403(b)s, traditional IRAs and Roth IRAs, cash-value life insurance plans, and guaranteed income annuities.

At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).

Is 50 too late to build wealth? ›

Indeed, it's never too late for anything in life and by following certain rules, you can still get wealthy after 50, experts said. “If you've started saving later in life, don't get discouraged,” said Joe Camberato, CEO of National Business Capital. “Instead, focus on what you can control.

Some financial advisors recommend a mix of 60% stocks, 35% fixed income, and 5% cash when an investor is in their 60s. So, at age 55, and if you're still working and investing, you might consider that allocation or something with even more growth potential.

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.

The ideal monthly retirement income for a couple differs for everyone. It depends on your personal preferences, past accomplishments, and retirement plans. Some valuable perspective can be found in the 2022 US Census Bureau's median income for couples 65 and over: $76,490 annually or about $6,374 monthly.

Rowe Price analysis suggests that 45-year-olds should have three times their current income set aside for retirement. This savings benchmark rises to five times current income at age 50 and seven times current income at age 55.

If you start from scratch at age 50, you are behind, but you can still make this financial milestone happen. If you have an above-average income, retiring as just a millionaire will likely allow you to maintain your standard of living through retirement.

It is never too late to start saving money you will use in retirement. However, the older you get, the more constraints, like wanting to retire, or required minimum distributions (RMDs), will limit your options.