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The Best Way to Invest 10k in Your 50s

  • December 5, 2022

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If you find yourself in your 50s, your financial situation has likely changed over the decades. You could find yourself more financially secure and looking for ways to invest 10k that allows you to plan for a comfortable retirement. Or, perhaps you’re feeling a bit panicked at how quickly retirement is approaching, and you’re acutely aware of your need to catch up. 

Whatever your financial situation, your 50s is a great time to make some smart investments and put together or improve a finance plan. 

Take a look at what you should do with a 10k investment at your age.

What You Need As A 50-Something Investor 

There’s still some room for risk in the way you invest, but you won’t be as willing to lose your money as you were 20 or 30 years ago. The best way to invest in your 50s is by diversifying what you hold, considering target-date investment plans, and giving yourself the space you need to make adjustments as financial goals change and retirement draws closer. 

At this point in your life, it’s critical to review your personal finance basics. How much are you earning and how much are you spending? How far are you from your targets? When will you retire? You should be evaluating your debt and what you’ll need to live comfortably when you’re no longer bringing in a full-time salary.

Invest In Stocks

Will the market continue to fluctuate and leave you wringing your hands over the balance in your brokerage account? Probably. But, with an investment of $10,000, you can set yourself up to earn some impressive returns even while you push through the spikes and dips in the market. 

When you’re in generally good health in your 50s, you’ve still got plenty of time to recover from a bad day or a bad week in the market. 

Invest Your 10k In A Roth IRA

You’re in your 50s, and if you’re in a higher tax bracket you’ve likely strayed from the Roth IRA as an investment vehicle. 

It’s still a great place for your 10k. 

Investing in a Roth IRA gives you the flexibility you are likely to need in another 10 or 20 years, when you need to withdraw from your savings without paying taxes. The Roth IRA can also be better for older Americans who want to pass money onto their heirs. 

Max Out Your 401k

If you’re still working, and you still have access to your company’s 401(k), leverage the contributions that you and your company can make. There’s a catch-up contribution allowed starting at age 50: 

The IRS will allow additional salary deferrals of $6,500 in 2022 and $7,500 in 2023. Ongoing amounts will depend on cost of living adjustments. With a $10,000 contribution, you'll have some money leftover to invest in other places. 

You also don’t need to be behind in what you’ve contributed in order to take advantage of this extra deferral. 

As your years progress, your diversification strategy should spread. You want to have a good mix of stocks, bonds, real estate, and other assets preparing you for retirement.

AUTHOR BIO:

Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author.

He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.

He loves to share his personal finance tips and money management wisdom with others on his website, ShawnManaher.com, to help them find financial freedom.

Author Pic: https://shawnmanaher.com/wp-content/uploads/2022/07/shawn.jpg

 

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