Restarting Financially at 50: Seven Essential Tips

Starting over financially after a significant life event such as bankruptcy, divorce, or career change can be daunting, especially post-50. However, it’s entirely possible to regain your financial footing at this stage of life. Here are practical ways to restart your financial journey at 50 or beyond.

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1. Find Work You Love Using Existing Skills to Starting Over Financially

When starting over financially at 50, leveraging your existing skills by finding employment or freelance opportunities can be particularly effective if you niche down into sub-niches. For example, if you have experience in marketing, you might specialize in digital marketing for healthcare, a niche that could benefit from your depth of knowledge and experience. This focus can make you highly valuable and sought after, which can be incredibly beneficial when you’re starting over financially. Enjoying what you do and being recognized as a specialist makes it easier to adapt to new work environments or manage longer hours.

Finding work that uses the skills you already possess helps to reduce any mental strain when working. You also do not need to spend some time in any training. You will also likely perform better in the job for which you already have skills.

Taking work you love will boost your patience. It also provides you with enough income as you wait.

2. Maximize Retirement Contributions Through Employer Match

Many employers will match your contributions into a retirement plan. This means you double the amount of money you contribute to this scheme. Finding an employer who has a 401 k plan is one way of ensuring you do this. It allows you to get free retirement money to use later in life.

That said, finding a catch-up contribution program at this age works for many people. This plan allows you to contribute an extra amount of money into the IRA retirement plans such as the 401k and 457 plans.

You can also defer salary payments to save more with those plans. Find out if your employer has any employer-sponsored retirement plans that allow you to defer payments to increase contributions to the IRA.

Unlike the IRA, emergency funds such as the Roth IRA help you to double the amount on the retirement account. Further, you can withdraw all the contributions from this account without incurring any penalties.

3. Make Prudent Investment Decisions for Starting Over Financially

You will always attempt to invest at any age in the hopes of increasing your income. However, that comes with a risk of losing even the capital depending on the type of business and how you do it.

Most people never think about measuring investment risk when choosing an investment. Although every business and investment has some risk, it is always advisable to invest in a low-risk business. The exception is when you prove that a high-risk investment has high returns.

Low-risk businesses are those that do not have the risk of losing the principal. This happens, for instance, when the investment is guaranteed by the government or an insurance company.

They may include but are not limited to bonds and stocks. Stock index funds may have a high risk while individual stocks are rated as with extreme risks.

Further, it is advisable to go slow with the investment and start growing it slowly rather than putting a lump sum into it. That said, always avoid the get-rich schemes and investments.

4. Consider Delaying Social Security Benefits

Taking Social Security at the age of 70 instead of taking it at an early age provides far more inflation-adjusted income. The amount you were supposed to receive will increase by a given percentage for each year you defer taking those benefits.

The benefits could increase by as much as 40 to 50 percent if you take it at the age of 70. Consider that taking the benefits early also reduces your spousal benefits. Hence if you are married and are starting over, each should wait.

You can apply for withdrawal of the benefit even if you have started receiving those benefits. You only need the time before a one-year window is over to repay the amount received so far.

It is also possible to repay if the one-year window is over and the amount repaid will be far less than the benefits you reap waiting. After repaying, you can apply for the benefits later as if you never had started receiving any.

5. Explore Lifelong Learning Opportunities

Engage in lifelong learning to keep your skills updated and expand your professional network. Platforms like Coursera and Udemy offer courses on finance, investment, and business management, often at reduced rates for seniors. Continuous education is a key strategy for maintaining employability and financial acumen when starting over financially.

6. Leverage Community and Governmental Resources While Starting Over Financially

Look for free financial planning workshops, career counseling, and grants for starting a new business from community centers and government agencies. The U.S. Small Business Administration (SBA) offers guidance and support for mature entrepreneurs looking to start over financially. These resources can provide substantial support without significant investment, making them ideal for someone restarting financially.

7. Additional Learning Tools

To deepen your understanding of personal finance and investment, consider using tools like Khan Academy for free courses, Investopedia for financial terms and tutorials, and The Motley Fool for stock investing advice. These resources can be invaluable when you’re starting over financially at 50 or beyond.

Taking work you love will boost your patience. It also provides you with enough income as you wait.

Key Takeaways:

• Utilize Existing Skills: Capitalize on your existing skills, potentially focusing on niche markets to increase your value in the job market.
• Secure Retirement Funding: Take full advantage of employer retirement matching and catch-up contributions to boost your retirement savings.
• Invest Carefully: Choose low-risk investments to safeguard your principal and ensure steady financial growth.
• Delay Social Security: Consider postponing Social Security benefits to maximize your future financial stability.
• Commit to Learning: Continuous education can keep your skills relevant and expand your professional opportunities.
• Use Available Resources: Utilize community and governmental resources to support your financial restart with minimal cost.

Financial Recovery