Ways to Build Your Wealth in Your 50s
Our midlives are filled with both challenges and opportunities. While you may well be in the thick of paying for your kids’ college educations, all the costs that accompany children will very soon be behind you. And while losing your job may be more of a risk now that you are getting older, you are also very likely enjoying your peak earning years.
When you are making the most money, you should also be saving the most money too. Around 40% of people who have saved successfully, i.e. built nest eggs that are equivalent to ten times their salaries, managed to do so by consistently saving at least 15% of their incomes over the course of at least ten years. This article outlines some tips to help you do just that! While you may well win big with the online blackjack in Canada, it is always a good idea to save something in case you don’t, as well!
Banish Thoughts of Your Bonus
Ten years ago or so your bonus would have helped you buy your house. Now it is recommended that you make use of it to shore up your future. The most successful savers put away any income over the norm, like raises, banner commissions, and bonuses.
Age is Not Just a Number
Don’t forget to take your age into account. The year that you turn 50-years old, you will be able to start making catch up contributions to your remaining retirement plans.
You Don’t Need a Crystal Ball to Look Into Your Future
Don’t let your energy flag as you reach the top of the hill! If you need help staying motivated to save, imagine yourself in 20 or 30 years time. Research has found that people who feel connected to their future selves are more likely to delay gratification. You can even create a picture of your older self with the technology available online today.
Don’t Touch Your 401(K)
When college costs hit you, that money looks very tempting -resist, no matter what it takes. Saving a steady 8% from the time you are 25-years old, with a salary of US$30 000 that rises 2% each year, and you will have a 401(k) of US$1.3 million by the time you turn 65-years. Take a US$10 000 loan at the age of 33 for your home, a US$10 000 at 50-years old for college costs, and make a US$10 000 early withdrawal when you are 62, and that amount drops to just US$930 000.
Make Sure Your Children Graduate When They Should
Ensure that your children graduate on time. Remember that, although most of us budget for them to finish up in four years, most students take five, and even six, years to complete their courses. At many schools these days the credit levels for full time enrollment is less that you need to graduate in four years, too.
To avoid having to foot the bill for another year or two of college tuition, make sure that your child is carrying the maximum course load, suggest summer community college courses if they are not, and put some sort of consequence in place if they are slacking off.