Everything You Need to Know About Investing in Your 50s

If you want to know more about investing during the other decades of your life, don’t miss our other posts in this series about investing in your 20s, 30s, 40s, and 60s.

You’ve reached a milestone in your life. If you’ve spent decades in your career, few people know what you do better. That is an achievement. You’ve been working long hours, juggling priorities, and making some of the most challenging decisions in life that you will ever need to make. By your 50s, you’ve experienced tremendous personal losses and successes, and you know a thing or two about what matters most in life. Now, it’s time to focus on protecting the financial gains that you have made throughout the years.

Even in a world of constant change, some things do remain the same. Fortunately, now is a great time to return to the fundamentals of paying off any debt you may have and increasing your savings. Begin with focusing on how you can eliminate higher interest loans. As you pare down that debt, increase how much you save each month. Once you’re on track with your retirement account, investing in your 50s becomes simpler.

Don’t take on new debt unnecessarily

Around every corner is someone trying to sell you something. Couples come up with creative ways to keep their spending under control. Others choose to buy only in cash. Here are a few ideas:

1. Don’t go shopping alone!
2. Leave your credit cards at home unless you’re planning a vacation.
3. Set a maximum purchase limit on your card.
4. Open a separate account (and a budget) for different types of purchases.

By setting spending limits, you remain a step ahead of taking on new debt if you do have an emergency or need to make a unique purchase.

Lower risk products to consider

A big part of a financial advisor’s job is to make sure that you know what your retirement projections are. You will know what you’ll be able to afford once you stop working when you review your monthly income payment. If you aren’t happy with how you’ll be able to live with what you have currently, then you’ll know how much more you need to tuck away to retire comfortably. The funds in your retirement account should be lower risk when you’re investing in your 50s.

Perhaps you started saving early or achieved success in business and in your career. Your retirement savings are secured and ready for when you need them. All the focus is now on your portfolio of investments, which raises a different set of questions.

Should you preserve or generate wealth investing in your 50s?

What are suitable investments in your 50s when you are a high net worth individual (HNWI)? Well, it will all depend on what your goals are related to your estate and other charitable actions you would like to take. Do you want to generate wealth, or is preserving the gains you’ve already made what is most important? How about doing both? A wealth manager is a valuable resource when sorting through these decisions.

Make smart asset allocations with a qualified financial advisor

When you make strategic plans to invest in your 50s, it should be an exciting time for you. You own that second home, and if you haven’t already fulfilled your bucket list of dream vacations, you’re planning them. Now is the time to begin (or revisit) estate planning.

Moments ago, we covered a fundamental question about wealth: preserve only or generate? Your wealth preservation bucket needs cover:

1. Living expenses
2. Other expenses
3. Beneficiaries
4. Charities
5. Taxes (property/capital gains)

Your wealth generation bucket would broadly cover:

1. Investment Capital
2. Discretionary funds

The asset allocation percentages for these two separate investment strategies will look very different. The investment vehicles for your wealth preservation bucket should have a large percentage of low-risk, low-return products in it, including US treasury, money markets, and fixed income assets. Your wealth generation portfolio may contain extended fixed income, hedge funds, global equity, including emerging markets, private markets, and commodities.

Choosing a wealth advisor who’s right for you

When you’re investing in your 50s, you should consider hiring a wealth manager to help you with investment planning decisions. SD Mayer & Associates is a full-service wealth advisory, tax, and accounting firm located in San Francisco’s Financial District. SD Mayer provides advisory services for pre-retirees, investors, and high-net worth individuals and their families. With decades of combined experiences at hand, we can help you feel more confident about how your capital is allocated as an investor in your 50s.

You’ve been working hard for decades. Now, if you’re turning your attention to investing in your 50s and are ready to refine your wealth management strategies even further, consider talking with an experienced wealth advisor. SD Mayer advisors have decades of experience helping individuals invest in every decade of life, whether it’s your 20s, 30s, 40s, 50s, or 60s. To learn more or to set up an initial consultation, contact us. 

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