The way you manage your finances depends a lot on your current life situation, and when you are in your 50s, you need to adjust how you save and invest. You are in your final years before retirement and you need to find the best ways to maximise your retirement pot. What are the top investments for over 50s?
Find the best instant savings accounts
Your financial situation changes as you approach retirement age. Your children have moved away and are starting their own working lives and you are hopefully getting closer to repaying your mortgage.
It is the perfect time to start focusing more on your savings and instant savings accounts (ISAs) are one of the best ways to boost your retirement pot.
The ISA rules changed just this year and you can now choose how you spend your money. As diversification is the best way to ensure you make the most out of your money, it is a good idea to start saving with an ISA.
Use comparison websites to compare different ISAs to ensure you find the best ISA for your needs. You definitely need to consider carefully whether you want to open a cash ISA or a fixed rate cash ISA.
The main difference between the two is that a cash ISA allows you an easier and instant access to your savings. Consider how likely it is that you might need to withdraw some of your savings, for instance, in case of an emergency.
Some companies might also offer specific ISAs for people over 50. Although these can be a great option, you don’t necessarily always get a better deal with them. You should always compare normal ISAs to special 50s scheme ISAs to ensure you find the best option.
Diversify your investments
You shouldn’t just put money aside for a savings account in your 50s. Since you are closing in on your retirement, you don’t want to take huge risks with your money.
One good option is to consider investing in bonds, as these don’t need to be a long-term investment and you can find plenty of bonds that offer low risk opportunities. For instance, you could opt for the NS&I premiums and bonds, which even offer you the chance to win tax-free prizes every year!
You should also consider alternative investment options. If you have enough money to invest in property or gold, these could be alternative investment opportunities that can enhance your financial situation further.
Make sure you take advantage of free financial guidance available through websites like Money Advice Service before you make big investment decisions.
Most importantly, your investments in your 50s should focus on making the most of your retirement savings. Therefore, you need to calculate your current retirement savings to find out how much more you’d still like to save.
If you feel like you should save more, it is a good idea to consider retirement annuities. Again, it is a good idea to use comparison websites to find out which annuities offer you the best return for your investment.
The key is to focus on ensuring you have enough savings for retirement or to come up with a proper plan to save more in the final years. Investing money in your 50s should focus on low-risk and easy access investment. Remember to diversify and compare different opportunities before you make your final investment decisions.