Investing Tips That Are Not Too Late to Learn

Your 50th birthday is receding into the past, your investment portfolio is a work of art and you have a pretty impressive retirement account. You may think you have things all figured out. But there is always more for you to learn and do with your finances.

Here are investment tips many investors aged 50 and older still need to learn.

Even in retirement, you need stocks in your investment portfolio.

"Just because you retire doesn't mean your portfolio needs to become super conservative with fixed income," says Jarrod Sandra, a Certified Financial Planner and owner of Chisholm Wealth Management in Crowley, Texas. "You have to balance sleeping at night and making your money last through retirement."

That means you need to continue to have a significant slice of your assets in stocks along with Treasury and AAA-rated corporate bonds and other conservative investments.

"I prefer to have clients set aside two to five years of income (where possible) in more conservative investments to weather out any potential storm," Sandra advises.

Try as you might, you won't be able to guess the best time to buy or sell stocks.

"One of the toughest lessons to learn and truly internalize is that no one can consistently and reliably predict or time the stock market," says Carla Adams, founder and financial advisor at Ametrine Wealth in Lake Orion, Michigan. "Attempting to time the market — to sell in anticipation of a bear market and buy before a bull market — can be detrimental to wealth building."

So ignore the noise about market trends and instead stick with a long-term investment strategy.

"We are constantly bombarded with speculation about market trends from both the media and our social circles, making it challenging not to react," Adams says. "However, committing to a long-term investment strategy and staying the course is the most dependable path to building wealth."

This is an easy way to improve the return on an investment. Choose an investment with low expenses.

"While it may seem obvious, keeping investment expenses low is crucial," Adams says. "Yet, many expensive mutual funds, ETFs, and hedge funds continue to attract investors. By minimizing investment costs, you can retain more of your earnings, allowing your money to grow more effectively over time."

Your 50s are a great time to catch up on your retirement savings. Put aside all you can.

"Once you turn 50, you are eligible to make 'catch-up' contributions to employer-sponsored retirement plans and IRAs," says Christopher Lazzaro, founder and president of Plan for It Financial in Salem, Massachusetts. If you participate in your employer's 401(k) plan, you can sock away an additional $7,500 in 2024 on top of the $23,500 maximum for younger savers. For IRAs, you can add an additional $1,000 on top of the $7,000 maximum contribution.

Be tax smart with the types of investment accounts that you use.

"Consider tax efficiency in where you hold assets," says Joseph Boughan, the managing member and financial planner at Parkmount Financial Partners in Boston. "Dividend-paying stocks and bonds might be better suited for tax-advantaged accounts, while growth-oriented assets can remain in taxable accounts. This strategy may offer incremental gains that compound meaningfully over time."

Look beyond the United States for your investment choices.

"It is important to ensure your portfolio is globally diversified," Boughan says. "Relying solely on U.S. large stocks can present a significant potential pitfall. For example, during the 'lost decade' of 2000 to 2009, U.S. large-cap stocks saw losses, but investors with globally diversified portfolios, including U.S. small-cap and international stocks, ended the decade positively."

Be aware that an investment that you make today and hold onto may compound in value over time.

"Use the power of compounding and be a max saver if possible," says Marc Alan Lescarret, a certified financial planner and founder of Marc Alan Wealth Management, in Rockaway, New Jersey.

If you have any credit card debt hanging around, now is the time to pay it off.

"Stop paying credit-card interest and pay your debts in full," Lescarret says. Paying off your credit card balance lets you avoid card issuers' interest charges, which average about 20% annually. If you zero out your card balance every month, the money you now pay in card interest stays in your pocket, ready for you to invest.

Although it may be tempting, don't go after large investment returns.

"Don't chase amazing returns, keep it simple and diversified," Lescarret says. "If you chase many 20%-plus-a-year pitches, expect some massive losses and fees to offset your winnings."

They let your savings for future health care costs grow tax-free.

"If you are in a high-deductible health plan with a Health Savings Account (HSA), you can invest a portion of your contributions for tax-free growth, as long as you eventually use the money for health care-related expenses," Lazzaro says.

And you'll have plenty of investment choices with a Health Savings Account.

"HSAs typically have a menu of investment options as you would find in your 401(k) or other employer-sponsored retirement plan," Lazzaro says. "HSAs are also eligible for "catch-up" contributions beginning at age 55."

Once you reach 50, you will not only want to save regularly, but you should also save first beyond other financial choices.

"Pay yourself first," Lescarret says. "You can't borrow for (retirement), but your kids can borrow for school."