Ask any successful investor the best way to grow wealth, and they’ll tell you that starting early and contributing regularly is a foolproof way to make sure you will have the means to live comfortably when you wind down your work life and start your retirement years.
But what if you are starting later than you would have hoped? “The sooner people save, invest, and prepare for the realities of aging and declining health in retirement the better their golden years will be, but it is never too late to make moves to help boost savings, income, and protect your retirement from the unexpected twists and turns of life,” said Chris Orestis, founder and president of Retirement Genius.
Read More: Here’s the Minimum Net Worth Considered To Be Upper Class in Your 70s
Learn More: 9 Low-Effort Ways To Make Passive Income (You Can Start This Week)
Baby boomers looking to grow their net worth should continue to save enthusiastically, spend sensibly and reduce major expenses, but they may also need to add a couple of different options to their financial playbook before it’s too late. Here are some expert strategies for boomers who want to grow their wealth.
Many experts recommend that seniors buy lower-risk investments like exchange-traded funds (ETFs) and dividend-paying stocks, which offer the possibility of both growth and income. Others support a more aggressive approach by keeping a portfolio heavy on stock market content. For Paul Ferrara, senior wealth counselor and client relationship manager at Avenue Investment Management, boomers can’t afford to neglect the positive results that “interest on interest” compounding provides.
“Compounding works even during retirement as many boomers assume that they are at the growth stage when they have set up assets,” Ferrara said. “Even after having sold the income heavy portfolio and replacing it with a balanced combination of dividend equities and low volatility bonds, wealth may continue to grow even though risk remains within a comfortable band.
“An example that I frequently run in my hypothetical models is that a portfolio of the value of $1,000,000 with a yield of 4% reinvested year after year over a decade would yield an extra $480,000 without an increase in risk allocations,” he explained.
Find Out: How Much Should the Average Middle-Class Baby Boomer Have in Savings?
You owe it to yourself to take advantage of catch-up contributions to 401(k)s and IRAs if you are still employed. Compared with younger workers, those over 50 can make a substantial contributions, and those over 60 have opportunities not available to younger workers, according to Orestis.
Story Continues
