7 Ways Investors in their 50s Can Prepare for 2023

If you’re in your 50s and you need to make some money moves, here’s what you should do to get ahead in 2023. 

Ruth Saldanha 12 January, 2023 | 4:08AM
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Road horizon

Investors in their 50s are getting ready to retire, and can already picture their ideal retirement, but still have some work to do before they get there. In their 50s, investors need to navigate complex financial needs and life commitments, and that means repositioning portfolios for optimal return and risk levels.

This can be scary for investors, as they have to juggle multiple priorities including balancing their peak earning and saving years, managing their busy professional lives and family commitments, and also keeping on top of health and personal maintenance.

“Workers at this life stage may be at their peak earnings level, and therefore may have more complex financial needs than their younger counterparts,” says Christine Benz, Morningstar’s Director of Personal Finance, and this includes not just earnings and savings rates, but also the tax efficiency of their investments.

Some of the questions on an investor’s mind may include:

• Given the market moves, will I have enough capital to reach my goals? Are my goals realistic?

• How do I make the most of my savings? What are my smartest investment options?

• What impact would a market crash have before retirement?

To help with some of this, the team at Morningstar Investment Management has some tips:

7 Actions for Investors in their 50s to Consider

  1. Address the impact of taxes: As investors in their 50s accumulate savings outside tax-advantaged wrappers like RRSPs and TFSAs, taxable gains become more important. Making the most of the available investment structures could help.

  2. Behavioural coaching: Research shows that behavioural coaching can add meaningful value. Or conversely, bad behaviour is destructive. To avoid bad outcomes, focus more on the principles of good investing and associated habits.

  3. Consider different portfolio combinations: Meeting goals is an individual experience and tracking the TSX 60, or S&P500 is not for everyone. Embrace a portfolio combination that you feel positive about, but don’t overcomplicate the situation.

  4. Maximise saving: As your earnings near their peak and some costs subside, it is more important than ever to maximise the amount being saved. Focusing on your progress toward your goals is key.

  5. Shift the conversation to value drivers: Could you benefit from broader financial planning? All too often, we think about investing first, but the foundations are just as important.

  6. Discuss investing in real terms, after inflation: After inflation, cash is often a terrible investment, eroding the purchasing power. With cost-of-living increases, could a real return strategy work?

  7. Reconfigure the “why” of investing Goals are a north star. Research shows that 71% of people change one of their top 3 goals by doing a simple review comparing to a master sheet of common goals.

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About Author

Ruth Saldanha

Ruth Saldanha  is Editorial Manager at Morningstar.ca. Follow her on Twitter @KarishmaRuth.


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