Sat Jul 13 2024, by Tyler Gardner

How to Invest $100,000 in Your 40s or 50s

Here is how I would invest $100,000 if I were in my 40s or 50s. I'm Tyler, a former financial advisor and portfolio manager, and now I create financial content for free to help you make informed investment choices.

1. Balance Stability with Growth

I would start by balancing stability with growth. I would consider allocating a portion of my portfolio to blue chip stocks, government bonds, and real estate investment trusts (REITs). Historically, blue chip stocks have averaged between 7% and 10% annually. Government bonds provide a steady fixed income stream, and REITs offer attractive dividends.

2. Max Out Retirement Accounts

I would max out every one of my retirement accounts. Once you hit 50, you can turbocharge your retirement savings with catch-up contributions. This means you can put an extra $1,000 into your Roth IRA or a whopping $7,500 into your 401(k). Imagine the impact of that extra $7,500 annually over the next 15 to 20 years.

3. Consolidate Old 401(k)s

I would take this opportunity to consolidate all of my old 401(k)s. Not only does consolidating simplify management, but it also eliminates unnecessary administrative fees. Americans waste over $1,000 annually on forgotten or unused 401(k)s.

4. Continue Investing in Growth Stocks

I would continue to invest in aggressive growth stocks just as I did in my 20s or 30s. Just because I’m in my 40s doesn’t mean I’m ready to play it safe! With the average retirement age in the US being 65, you still have access to potentially two decades of growth (or even more). Remember, you don’t even have to touch that traditional 401(k) until you’re 73, and you never have to touch the Roth IRA or Roth 401(k), which can continue to grow indefinitely for you and your estate.

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