You’re in your 50s or 60s, and you’ve not embarked on your investing journey yet. You’re reading about how investing can help you reach your financial goals, and the concept of making your money grow seems like an exciting prospect. However, with being that little bit closer to retirement, you might be worrying that you’re a bit late to the game and the investing ship has already sailed for you. But the truth is, it’s never too late. Investing is something that can benefit us at all stages of life, there might just be different considerations to take into account.
The importance of investing money when you’re older
When you reach your 50s and 60s and retirement is in sight, it immediately feels like the investing train has left the station. But there’s a number of reasons you should be investing as an older person.
1. You may live longer than you expect
The truth is, people are living longer which makes it crucial to invest your money. In the United States, for example, the average life expectancy has increased from about 70 years in the 1960s to about 79 years today. And many people live way beyond that. So if you retire in your 50s or 60s, it’s possible you’ll need money for 20 or 30 more years, and which current pension plans and savings might not cover. So investing your money will allow older people to stretch it as far as possible. A $100,000 nest egg that would only last a few years could work for itself and make excess to live off of for many years to come. So why wouldn’t you give your money the opportunity to grow?
2. Most investments are safe
When you’re older, you may associate investments with risk and volatility, which doesn’t seem like an alluring prospect when preserving capital and assets is at the forefront of your agenda. But not all investments are risky – in fact, there are a ton of safe investments out there. For example, dividend stocks generate regular income for the investor, which is perfect for older investors. You can also think about investing in more non-cyclical bonds – stocks that belong to vital consumer companies that are not as reactive to market movements than cyclical bonds. And let’s just say the thought of stocks all together doesn’t appeal to you, there are safer options such as bonds or actively managed funds, which could reduce the amount of stress you’re putting on yourself as you get older.
