Investing in your 50s

You’re in your 50s and you’ve made it through many of life’s ups and downs. Congratulations! In an ideal world you’re settled into your career, if you had kids they have probably finished school and moved out. Your mortgage is paid off, or could be shortly. Your retirement savings are well on their way to your goal. Now things get easier, right? Well, that was the plan anyway. 

The reality is a little different for many of us. Nowadays, kids can be living at home well into their 20s and even 30s. University/college costs continue to rise, causing many students to graduate with debt that will take years to pay off. The continual increase in cost of living means more of our children are moving back home after university or trying to make it on their own. Even for many of us without children, we are in a world that costs much more than what we had originally planned for in our youth, and those bills can rack up and cut into retirement funds. This economy means our mortgages are taking up larger portions of budgets and it can be quite challenging financially for many of us. Even the dream of retiring early seems to be fading for some of us.

With all of that in mind, we have a few ideas to help you stay on track towards a great retirement.

Your 50s are an excellent time for you to check in on your financial goals. You likely have more disposable income than you did in earlier years.

Start by calculating how much money you would like to have when you retire. If you’ve already done this, why not take a few minutes to double-check your earlier calculations? If you want to try a nifty tool, the Government of Canada has a Canadian Retirement Income Calculator.

While budgeting can seem and feel like a chore at times, it’s absolutely worth taking the time to review your income and expenses. There are many budgeting and spending tools and apps available, and most are free

Whichever tool you use, whether it’s an Excel spreadsheet or an app on your smartphone, it’s important to take a hard look at where your money actually goes. Who knows? You may even find some places to cut spending and save more for your retirement.

We know what some of you are thinking. Isn’t it too late to start saving (or saving more)? Not at all. With the power of compounding on your side, getting started as soon as you can is the important part.

Focusing on saving may also involve an honest conversation with your family. We all want to help our loved ones as much as we can, but your retirement is coming. If you’re going to be where you want to be, you may need to prioritize yourself and your own savings at this stage of life.

Working a few years more may not sound exciting, but delaying your government retirement benefits can increase the amount you receive when you actually start getting them. The Canadian government offers retirement benefits through programs such as Old Age Security (OAS) and the Canada Pension Plan (CPP). The amount received from these programs is based on the individual's earnings and, in the case of the CPP, the number of years they have contributed. By delaying the start of these benefits until after the age of 65 (the standard age of eligibility), individuals can potentially increase the amount they receive each month.  

Another potential benefit of delaying government retirement benefits is that it can provide you with more time to save and invest for your retirement. By delaying the start of their benefits, you can continue to work and save money in your retirement savings accounts, potentially increasing the size of your nest egg. This can provide you with more financial security in your later years and give you the flexibility to retire on your own terms.

The average lifespan in Canada is rising into the 80s, and medical science shows no sign of slowing down when it comes to finding ways to live longer. If you’re going to be investing your money for another 30 years or more, paying excess fees can have a serious impact on your overall portfolio size.

Our final thought? Don’t panic! You may have a bit of work ahead of you, but you still have time to get your retirement plan back on track (if it isn’t already).

Note: The information in this blog is for information purposes only and should not be used or construed as financial, investment, or tax advice by any individual. Information obtained from third parties is believed to be reliable, but no representations or warranty, expressed or implied is made by Questrade, Inc., its affiliates or any other person to its accuracy.