No savings with 50? You can retire rich with these tips

Bear in suit faces falling stock market crash Crash on the stock market

Having no savings at 50 is not ideal! The earlier you start saving for retirement, the more you benefit from the compound interest effect.

Still, at 50, you have almost 20 years until retirement. Assuming you have an income, you can build up a considerable financial cushion during this time and retire rich.

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Every year counts if you don't have savings by the time you're 50

My first tip is to start saving immediately. If you don't have savings at 50, make sure you have savings at 51! The sooner you start building your retirement fund, the better. Every year counts to increase your financial freedom in old age.

At an annual rate of return of 5%, z. B. £ 10.000 over 10 years at £ 16.3.000, but you would end up with £ 26,6.000 after 20 years. Start saving right away, as we said. Don't put it off until next year or some vague point in the future.

Every cent counts

My second tip: save as much as you can. Just as every year counts, so does every cent saved.

Save wherever possible. Most of us can reduce or eliminate some areas of our recreational spending without noticeably worsening our lifestyle. Once you have figured out how much you can save per month, treat it like any other necessary expense, such as a mortgage. B. A mortgage payment or water bill. As your income increases, prioritize increasing your savings over your spending.


If you start saving at age 50, savings accounts will not significantly increase your money over the period until retirement. You might be lucky enough to get a real (after inflation) annual return of 1%.

Such a return over a 20 year period would be £10.000 on just £12.2.000 increase, compared to the £ 26.6.000 with a yield of 5%, which i mentioned earlier. There is a reason why I chose this 5% yield. This is the starting signal for my third tip to retire rich.

Investing in the stock market

The average long-term real return of the uk equity market has been around 5% per annum. Over short periods of time, the market can experience quite dramatic downturns, as we are currently seeing. However, it has always recovered and reached new heights, achieving an average return of 5% per year over several decades. My third tip: invest your savings regularly in the stock market.

There are low-cost tracker funds that track the returns of the major stock indices. With a 5% return, you may be able to reach your retirement goal now. This will depend on what the goal is and how much you can save. But what if a 5% rate of return is not high enough to meet the target of?

An annual return of 10 % over a period of 20 years would turn our aforementioned 10.000 £ whole 67.300 £ (compared to 26.£600 at 5%). It is possible to achieve 10% annual growth by buying shares in a carefully selected range of individual companies.

You have the best chance of success if you learn more about how companies work, how effectively they generate profits, and how they are valued by the market.

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This article was written by G. A. Chester written in english and published on 16.05.2020 on fool.Co.Uk published. It has been translated so that our german readers can participate in the discussion.

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