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You’ve worked hard for your money your entire life only to have a catastrophic event wipe out all of your financial reserves.
Maybe you got divorced, or maybe you lost your job and couldn’t get employed again in a timely manner.
Regardless of the cause, you find yourself with the need to start a new beginning and rebuild your finances so you can retire comfortably.
That means racing against the clock in order to set aside enough money while also funding your lifestyle for the immediate future.
There’s no denying the fact the road ahead of you is bumpy, but you’re older, wiser, and savvy enough to prevent yourself from falling into another pothole.
You are going to have to reinvent yourself to a degree as you find your way back to financial stability.
However, this is your opportunity to prove to yourself and the world around you that you can turn failure into success.
You can return to a life of financial abundance, and begin a new life that’s better than you could ever imagine. Here’s how to start over financially at 50.
Table of Contents
#1. Put Your Emotional Health First
It’s natural to experience depression and anxiety after suffering a major personal or financial trauma along with the upheaval that comes with sudden change.
The good news is, you don’t have to stay in this state forever when you engage in the proper mindset.
Taking care of your emotional and physical well-being helps improve your self-confidence and make the world around you take notice of you.
Your co-workers are more likely to pay attention to what you say, and you’ll draw positive attention to yourself when there’s a promotion coming up.
You’ll also be alert to lucrative opportunities that come your way.
Feeling good about yourself even in times of crisis has a way of paying off, no matter if you’re interviewing for a new job or looking to get ahead at work.
#2. Finding Money In The Short Term
Take a look at where you spend your money on a daily, weekly, and monthly basis to find areas where you can cut costs, and divide them into two categories: essential and non-essential.
You want to track where your money goes and determine if you can reduce your living expenses in as many areas as possible.
For example, check what your internet and cable bill look like.
Do you have the highest available speed for the internet and a maxed-out cable TV package?
Check for ways you can save in the form of going to a slower internet speed, and getting a smaller TV channel package.
Also, consider getting rid of streaming services that you’re not watching.
Consider too eliminating unnecessary spending on items that you don’t need right away.
#3. Build Your Emergency Fund
There’s a saying in personal finance of “pay yourself first”.
That means opening up a savings account and funding it with a percentage of your salary.
Some financial advisors say you should set aside 10% of your paycheck and deposit it into a savings account.
The good news is you can do this without the need of a financial advisor.
Simply review your finances and determine a percentage that makes the most sense for your current situation.
Keep in mind that an emergency fund is not the same as a retirement account, and that the money in the bank account is intended to cover an unseen emergency such as an auto repair or mortgage payment.
#4. Set Reasonable Goals
As you look to start over at 50, you need to keep your goals reasonable and easily achieved.
The first goal is to look at what you want to achieve in the years between now and retirement.
That includes asking yourself where you want to stand financially when you officially stop working and start retirement.
But don’t think you have to stop working entirely.
Maybe you just change careers to something you love that doesn’t pay as well.
Another thing to consider is how much debt you’re comfortable carrying around the time you retire, and if you desire a better life sooner than later.
For example, maybe your living expenses are high because of your house.
Does is make sense to sell your home and move into a smaller home or even a tiny apartment?
Doing this could free up a lot of money moving forward, allowing you to experience a new career or new life entirely.
With that said, it’s important to be reasonable with yourself and your goals.
Don’t beat yourself up if you don’t quite reach them in the way you thought you would.
You have to be open to the fact that life happens and even the best don’t achieve their goals.
This isn’t to say that setting goals is a waste of time. But rather you need to be OK with plans changing as life unfolds.
If you aren’t open to this, it leads to emotional trauma and makes you think that you’ve somehow failed.
Not reaching a personal goal is not a failure.
Instead, it means that you need to find a different approach or adjust your goals accordingly.
#5. Changing Careers At 50
By the time you reach 50, you’ve been on a career path for about 25 years of your life.
That means half of your life has been spent engaging in bettering yourself and gaining more experience to improve your finances.
Don’t be afraid to start looking for a brand new career or switch to a good-paying job.
Employers don’t always pay their employees what they’re worth in terms of work and life experience, especially their older employees.
A career change can be a scary proposition at this time of life, but it can also give you the financial security that you wouldn’t otherwise have.
There’s no time like the present to start looking for a new career that can help you overcome the financial losses you’ve suffered.
Your goal is to find financial freedom after you retire, and there are employers out there that appreciate your decades worth of experience and pay accordingly.
With that said, don’t shut the door completely to an entry level position.
While the pay will be less, but you can negotiate your salary and the position might offer other benefits that a higher paying job doesn’t.
And if you can quickly scale your income, this could be the best decision you ever make.
#6. Find A Second Income Stream
The internet is full of advice as to how you can find a side hustle to make more money and improve your finances.
The biggest issue facing you as you start over at 50 is the fact you have less energy and time than you did when you were 30.
The good thing about finding another stream of income is the fact that your life experience helps guide you in finding another stream that’s lucrative.
You can use your experience to work as a consultant or parlay your hobby into a small crafting business, or you can start a YouTube channel to share your passion with like-minded viewers.
You’ll find that there are a number of ways to make money on the side once you start looking at the possibilities.
Remember that just because someone else is doing something similar to you doesn’t mean that you shouldn’t try to do it on your own.
#7. Fund Your Retirement Account
You may feel like you’ve been funding your retirement accounts your entire adult life and you’ll do fine when you reach retirement age.
The truth is, you don’t know what your financial situation will be when you reach retirement age.
As a result, you should delay taking Social Security for as long as possible to maximize your monthly benefit.
In the event your employer offers a retirement plan and matches contributions, you should take advantage of the opportunity.
Employer contributions to a 401k are essentially free money that helps you fund your retirement.
You’ll have a sizeable retirement balance in just a few years of maxing out your retirement accounts.
Another way to save money for retirement is to open a Roth IRA and fund it to the maximum allowable contribution.
It’s another way to build wealth and let the money grow over time.
The only difference here is you fund the account with post-tax dollars, not pre-tax dollars.
While this won’t save you money today, your investments will grow tax free.
#8. Make Safe Investments
When starting over at 50, you have to be more understanding of the types of investments you put your money into.
There’s no time like the present to invest your money in the stock market, but don’t go into investing with an eye towards short-term gains.
Focus on investing in mutual funds and exchange-traded funds (ETFs).
Mutual funds let you share ownership in stocks with other investors, while ETFs are a pool of securities that track a specific index.
The major difference between both types of funds comes in how they’re managed.
A mutual fund is monitored closely by fund managers while an ETF has minimal oversight and undergoes rebalancing only when necessary.
Both types of investments require an initial deposit, then a recurring contribution every month.
You can find reliable and stable funds of either type with a low initial investment threshold and a minimal contribution going forward.
Major investment firms offer these funds to encourage people to invest their money and reap the benefits over time.
They can help you reach your investment goals while you work towards rebuilding your life.
#9. Put Off Taking Social Security
You can start your Social Security benefits at age 62, but that only gives you 12 more years of funding your account and reduces your overall benefit for the rest of your life.
It’s true that you can still work while getting your benefits if you start at 62 and pay into your account, but if you earn more than the maximum, your benefits are reduced.
The longer you work after starting over at 50, the higher your monthly benefit.
The full retirement age for people who were born after 1960 is 67 years of age.
Taking the retirement benefit at 70 instead of 62 results in an increased benefit of 30% for you, the wage earner.
In other words, you can boost your returns by 30% just by waiting 8 years to take it.
You may find it worth your while to work another 20 years and move to a part-time position as you reach retirement age in order to maintain income without impacting your benefits.
#10. Consider Filing For Bankruptcy
The idea of declaring bankruptcy may be a daunting one, but it can help you get a fresh start.
Bankruptcy helps you eliminate or resolve your debt depending on which chapter makes the most sense.
Your creditors are forced to negotiate repayment terms, and you may be able to hold onto more of your assets through a repayment plan.
Before you decide on declaring bankruptcy, consult with a lawyer first.
You need to understand the implications of bankruptcy upon your life and credit rating, and if it’s the right direction you should take.
In most cases, you are better off simply facing the uphill battle and working hard to pay off the debt you do have.
But if you accumulated a mountain of debt in your previous life, either because of your poor financial habits or from your former spouse, bankruptcy could be an option.
#11. Work On Yourself
Up until now, I’ve been focusing on your financial health.
You have to also look at your mental, spiritual, and emotional health as well, as these impact your entire life experience.
Therefore, it is important to work on self improvement.
What are the things you can do to better yourself and enjoy a better life experience? This includes eating better, exercising, working on relationships, and more.
The more you make yourself better, the more you are going to enjoy every aspect of your life.
#12. Surround Yourself With Friends And Family Members
Speaking of working on your relationships, starting over at 50 has to include friends.
Keep your old friends and make time for them.
If it’s been a while since you spoke with a friend, call them up.
Go out to lunch or see if they play games on their phone so you can play together.
Strengthening your bonds to old friends who have known you for a long time is a good thing.
It is also a good thing to make new friends.
Not only can they be someone to spend time with, but they might help you to see things in a new perspective.
Finally, both old and new friends can also encourage you and give you a pep talk when you might be sad of going through desperate times.
#13. Be Careful
Finally, when you start over at 50, there is the additional challenges of making sure you don’t put yourself at risk.
What I mean by this is, you could experience a midlife crisis, and as a result, ruin your finances, hang around with the wrong crowd, or make the wrong career change.
While life involves making mistakes and learning from them, you don’t want to be foolish.
For example, you might befriend some young people in your new career.
It can be easy to get lured into their zest for life and the way the don’t think things through to the end.
This could result in you partying too much, spending too much money, or more.
The hard reality is you aren’t in your 20s any longer. While you still can take some risks, you can’t take the same risks.
This isn’t to say you can’t be friends with younger people, it is just that you need to know how and when to draw a line.
You can still enjoy life responsibly and not get yourself into trouble.
I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.