Ask An Adviser: In My 50s and Sorting My Finances: Should I Invest or Hold Back After Trump’s Return? (2)

Top answer provided by:

Michael Mcgowan

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Hi James. That's a great question, and one many Aussies are asking right now.

I can't tell exactly what's right for you without knowing your full story. But I can share a way of thinking that works no matter what the news headlines say.

Start with the Big Picture

Think of sorting your finances like planning a road trip. You need three things:

1. Where you want to go (your goals)
2. Where you are now (your current finances)
3. How to get there (your plan)

1. Where Do You Want to Go?

Getting your finances sorted means different things to different people, but given you said you’re in your 50’s, you might ask yourself:

- When do you want to retire? At 55, 60, 65, or later?
- What does retirement look like for you? Travelling? Part-time work? More family time?
- How much money will you need each year?

2. Where Are You Now?

Take stock of:

- Your super balance
- Other savings and investments
- Any debts you have
- Your regular spending

This shows you the gap between where you are and where you want to be.

3. How Will You Get There?

This is your financial plan. You can create one yourself or chat with a financial adviser.

Your plan might include:

- Boosting your super contributions
- Investing outside super
- Cutting some costs
- Working a few more years
- Downsizing your home

But What About Trump and Your Savings?

Let's address your main worry. Here's a simple way to think about protecting your money:

- Cash keeps you safe in the short term. Your money in Australian banks is protected up to $250,000 per person, per bank.

- Investing helps protect you from rising prices over time. If your money sits in cash for 10-20 years, it won't keep up with the cost of living.

This is why most Aussies need both cash AND investments.

Two Smart Money Moves

1. Build Your Safety Net

Set aside 3-6 months of expenses in a high-interest savings account.

This "emergency fund" gives you breathing room when life throws surprises - like the hot water system dying or needing car repairs.

Having this money means you won't need to sell investments at a bad time or use credit cards with high interest.

2. Invest Bit by Bit

Instead of trying to pick the perfect time to invest (which nobody can do), put smaller amounts in regularly. This is called "dollar-cost averaging."

It works well because:

- You buy more shares when prices are low
- You buy fewer when prices are high
- You don't stress about timing the market

Is Now the Right Time to Invest?

If you're in your 50s with 10-15 years (or less) until retirement, that might feel pretty close. But remember, your money needs to last another 20-30 years after you stop working!

Markets don't have a red light that turns green when it's "safe" to invest. There's always something to worry about:

- The GFC
- Brexit
- COVID
- Ukraine War
- Rising interest rates
- Trump version 2 featuring Elon Musk (still in progress)

After all of the previous events mentioned above, markets have rebounded and gone on to new highs.  

There's an old saying: "The best time to plant a tree was 20 years ago. The second-best time is today."  

Next Steps

You don't need to overhaul your entire financial life overnight. But a few small steps can go a long way toward building the future you want. 

Here are some simple actions to consider over the coming weeks:

- Think about what retirement looks like for you. What would a great life after work feel like?

- Take a moment to check your current super balance and other savings. Knowing where you stand is half the battle.

- Set up an emergency fund if you haven't already. Even a few thousand dollars can create breathing room when things go off-script.

- If investing makes sense for your goals, consider starting gradually with regular contributions.

- And if it feels a bit much to sort on your own, talking to a financial adviser could help bring clarity.

Remember, you're not just planning for the day you stop working. You're planning for the decades that follow.

Focus on your own map - where you want to go and how you'll get there. 

That matters far more than who's in the White House.

While the Adviser Ratings Website facilitates the question and answer functionality, all such communications are between users and authorised financial advisers, of which Adviser Ratings has no affiliation. Adviser Ratings is not the advice provider and does not provide financial product advice and only provides information that is general in nature.

Article by:

Michael McGowan

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