Turning 50 can be a financial wake-up call. You may be earning more than ever, but also wondering if your money is working as hard as it could be. Whether you’re playing catch-up or feeling confident about your savings, now is the time to reevaluate your investment strategy.
At Advance Capital Management, we help investors align their investments with their personal long-term goals – whether that’s achieving a comfortable retirement or leaving a financial legacy. (Learn how here.)
So, we know, even if you plan to work for many more years, now is the ideal time to take action.
Because how you invest today shapes the options – and level of confidence – you’ll have later. According to Schroders’ Retirement Study, 62% of people don’t know how long their money will last — a sign that many lack a clear plan.
That kind of uncertainty doesn’t have to be your story. Here’s what you need to know about investing after 50 to stay on track and in control.
Key Takeaways
- Adjust your investment mix to balance growth with protection as your time horizon shortens.
- Take advantage of catch-up contributions to boost savings during your highest earning years.
- A personalized plan from a fiduciary adviser can help you invest more confidently and avoid costly missteps.
Reevaluate Your Risk Tolerance – But Don’t Abandon Growth
With retirement likely within the next 10 years or so, many investors start to feel the urge to play it safe. While reducing risk makes sense, going too far too fast can backfire. After all, you may need your portfolio to last 30 years or more.
The right amount of risk depends not just on your comfort level, but also on your overall financial picture. For example, if you have a pension or another guaranteed income source, you might be able to take on slightly more investment risk since you won’t rely solely on your portfolio to cover day-to-day expenses.
What to do: As a general rule, it makes sense to gradually reduce your exposure to stocks as you get closer to retirement. Shifting toward a more balanced mix of stocks and bonds can help protect your savings while still allowing for some growth.
This chart illustrates the "efficient frontier," which basically shows the relationship between risk and return. As you move along the curve (right to left), reducing risk gradually leads to lower expected returns – but also less volatility.
The goal isn’t to fall off the curve entirely, but to shift along it toward a more stable mix. Keep some exposure to growth-oriented investments (like diversified stock funds) to help outpace inflation.
Rebalance and Diversify to Stay on Track
If you haven’t checked your retirement or investment accounts in a while, take a look.
As markets rise and fall, the mix of investments you originally chose – your asset allocation – can slowly shift out of balance. You may end up with more risk than you intended or miss out on opportunities elsewhere.
The chart below shows how the top-performing asset classes have changed from year to year (2015-2024). One year, large-cap U.S. stocks may lead the pack; the next, they might trail behind emerging markets or bonds.
This unpredictable pattern is exactly why two key investing habits matter:
- Rebalancing means adjusting your portfolio back to your target mix – selling some of what’s done well and buying what’s lagged – to avoid becoming too heavily invested in any one area.
- Diversification means spreading your investments across a variety of asset types, so no single asset class has the power to sink your entire portfolio.
What to do: Rebalance regularly (maybe once a year) to maintain your preferred level of risk and return. And make sure your portfolio is broadly diversified across asset classes, sectors and even global markets to help smooth out returns over time.
Max Out Retirement Accounts While You Can
After 50, the IRS lets you make “catch-up” contributions to retirement accounts. This is a powerful way to boost your nest egg before you stop working.
2025 contribution limits (with catch-up):
- 401(k), 403(b) or TSP: $31,000
- IRA or Roth IRA: $8,000 (income limits apply for Roth contributions)
What to do: If you’re behind, focus on saving more before retirement, especially in tax-advantaged accounts.
If you’re on track, keep going and build flexibility into your retirement income strategy.
Begin Planning for Withdrawals – and How Much You’ll Really Need
When you stop saving and start living off your investments, the math changes. How much you withdraw (and when) plays a big role in how long your money lasts.
But before you create a withdrawal plan, you need a clear picture of what you’ll actually need.
What to do: Start by thinking about your future income needs and assets. Ask yourself:
- What are your estimated annual expenses?
- Will you have income sources like Social Security, a pension or part-time work?
- What’s the gap between that and your desired lifestyle?
When it comes to determining how much you need in your portfolio, a commonly used starting point is the 4% rule. In the first year of retirement, withdraw 4% of your portfolio, then adjust for inflation each year after. This assumes a roughly 30-year retirement and a balanced investment strategy.
Example: If you estimate needing $60,000 per year from your savings, that suggests a portfolio of about $1.5 million (60,000 ÷ 0.04).
Get Personalized Advice
Investing in your 50s isn’t just about making returns. It’s about coordinating all the moving pieces – income needs, tax strategy, Social Security timing, health care costs, estate planning – into a plan that fits your life.
A fiduciary financial advisor can help you assess your current financial picture, create a retirement income strategy, align your investments with your goals and risk tolerance, and provide support through ongoing guidance.
What to do: Consider meeting with a financial adviser to discuss your situation. You can get a clear answer as to whether you’re on track and what changes you may need to make with your investments.
The Bottom Line
Your 50s are a pivotal decade for your financial future. With retirement on the horizon, every decision matters more, but that also means every smart move has a greater impact.
If you’re wondering how to adjust your investment strategy after 50, this is a good time to talk to a professional. Schedule a consultation right now to see how we can help you make the most of your next chapter.
