We just collaborated with journalist Robyn A. Friedman on a story for City & Shore magazine about how you can build wealth at any age.
What’s the secret to building wealth at age 50, 60, 70 and beyond?
Create a financial plan. “If you’ve hit age 50, it’s time for a reality check to see if you are on track for retirement, or if you’ll need some major tweaks to make your plan work,” we told Robyn. Don’t be like an ostrich, and stick your head in the sand. We get it; it’s not always pleasant to face facts. But the sooner you look reality in the eyes and get competent financial help, the sooner you’re on your way to a better future.
Keep stuffing it in. Once you turn age 50, don’t forget that you can stuff extra money into your IRA, Roth IRA, 401k and other retirement plans (an extra $1,000 per year into your IRA and $6,000 into your 401k). If you don’t have a retirement plan at work, you may be able to set one up for free if you have your own business or a side job. Don’t know the rules? Ask a Certified Financial Planner™ or your CPA for help.
And don’t take it out. You can’t build wealth if it’s flowing out faster than you can shovel it in. Cut up the credit cards, stop raiding the investment kitty, and do a retirement test-run to see if you can really live (forever!) on a slimmed-down retirement budget.
Don’t rush to claim Social Security. You’ll usually end up with meatier lifetime benefits if you wait longer to claim, especially if you’re married and coordinating benefits with your spouse.
Get the kids on their own two feet. How many promising retirements have been undone by overindulgent parents and entitled adult children? The parents are in their 50s, or even 60s, and they’re still shelling out for the kids. They subsidize the kids’ rent, help pay off college loans, pay for private pre-school, underwrite the wedding of the century. All while their own savings won’t keep them afloat for more than a few years once they stop working. (Note: This does NOT apply to fur-children. You can spoil them all you want. House rule).