At 68, I have no investments. My $80,000 condo is paid off and I have $60,000 saved. Am I too late?
-Bernard
It’s never too late to start investing and managing your money. But I don’t want to sugarcoat it. If you’re planning to invest for retirement, starting in your late 60s certainly limits your options. So let’s discuss some of your options. (If you have other questions about investing or retirement planning, this tool can help you find potential advisors.)
Consider alternative forms of income
With limited savings, you probably can’t afford to ignore Social Security and other sources of income. If you haven’t started claiming your Social Security benefits yet, remember that you’ll get the maximum benefit if you wait until age 70.
It’s also worth exploring other options to maintain your income into old age. Can you continue working in your current role, find part-time work, or do consulting on the side?
Delaying full retirement will increase your cash flow in the near future, allow you to plan for a shorter retirement, and may have room to save and invest. (If you have more questions about maximizing your retirement income, this tool can help you find potential advisors.)
Paying off your home is great, but think about other cost-cutting measures
The fact that you own your $80,000 condo outright is commendable. And depending on your location, there may not be many other properties in a lower price range, so you may have limited options for downsizing or finding more affordable housing.
But think about how you can reduce your expenses on transportation, travel, food and other costs. With minimal savings, you need to keep a careful eye on your expenses.
Determine the appropriate asset allocation
If you plan for your $60,000 to last decades into retirement, it’s worth considering a proper investment balance that takes into account both short-term liquidity, medium-term time horizons, and long-term growth. If you keep your money 100% in cash, it typically won’t keep up with inflation, and your nest egg will lose value over time.
Working with a financial advisor can help you build a portfolio and project retirement expenses and income needs in the future. A holistic advisor may also be able to help you navigate the tax implications of your income and retirement projections.
Depending on your financial situation, consider whether you qualify for a financial advisor or even free financial help from a source like the Financial Planning Association. (If you have other questions about investing or retirement planning, this tool can help you find potential advisors.)
Next Steps
It’s never too late to start investing, but starting in your late 60s will impact your options. Think about Social Security strategies, income sources, and appropriate asset allocation. A financial advisor may be able to help you map out your investment and income plan for the next few decades.
Tips for finding a financial advisor
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Finding a financial advisor doesn’t have to be difficult. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview the advisors you find for free to help you decide which one is right for you. If you’re ready to find an advisor who can help you reach your financial goals, get started now.
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Consider several advisors before choosing one. It’s important that you find someone you trust to manage your money. As you weigh your options, consider asking an advisor these questions to make sure you’re making the right choice.
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Have an emergency fund ready in case unexpected expenses arise. An emergency fund should be liquid – in an account that is not exposed to the risk of large fluctuations like the stock market. The downside is that the value of liquid cash can be eroded by inflation. However, a high-yield account allows you to earn compound interest. Compare savings accounts from these banks.
Susannah Snider, CFP®, is SmartAsset’s financial planning columnist and answers readers’ questions about personal finance topics. Have a question you’d like answered? Email [email protected] and your question may be answered in a future column.
Please note that Susannah is not a participant in the SmartAsset AMP platform and was an employee of SmartAsset at the time of writing.
Photo credit: ©Jen Barker Worley, ©iStockPhoto/Moon Safari, ©iStockPhoto/Milan Markovic
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