If You're In Your 50s or 60s... You Need To Watch This.

Hey there, real quick before we jump into the episode, listen, if your earnings treadmill hasn't set you free yet, running faster won't either. Listen, hustle without principles just going to burn you out. So here's what I want for you. I want you to join me for my money machine experience Live. It is three free trainings. Deep dive into how to escape the treadmill and build a money machine that actually works for you. All right, grab your spot here by going to moneymachinelive.com and I'll see you in the free training. What would you do if you were in your 50s or 60s with little to no savings, knowing that retirement is right around the corner? You're sitting there feeling the angst of saying, I want out of this job, I want to stop doing this or I want to slow down. But you realize that the bank account isn't at a level that allows you to do it. So if you've ever felt like you're running out of time to secure your financial future, well, this episode is going to be for you. In as much as you can find this overwhelming, here's the truth. You still have time, and it's not too late to create that detailed plan to take action to build security that you need to have a dignified retirement. So in this episode, I'm going to show you exactly how to maximize Social Security, invest wisely even at this stage, and to use a stress tested financial plan to prepare you for the retirement you deserve. So no matter where you're starting from, we're going to give you the path to make it happen.

All right, so you're in your 50s, you're in your 60s, and you feel like, man, I'm behind. I don't think I have enough or I don't even know where I'm at, or I have nothing saved for my retirement yet. Retirement's on the horizon. I can see it. It's coming. And I get this because, listen, I'm 63.

And when you start to look, you start to go, well, wait a second, what do I got? And what am I going to do? And how does that look and everything. So here's the truth though. You still have time. You still have time to make some meaningful changes and your financial future isn't set in stone yet. Now it's important to get this going because if you look at a new AARP survey said showed that 20%, okay, 1/5 of adults age 50 and over have 00 Zippo in retirement savings and more than half of them 61% say that they're worried that they'll not have enough money to support them in retirement. Well, wait A second, if 20% has nothing, then guess what, you're probably not going to have enough to support you in retirement unless you got some big pension or big inheritance. I don't want that. Now that I get is a tough reality. But there is a way forward and I want to show you how to create that. What you need to maximize the resources that you have at your disposal and set yourself up for a dignified, stress free retirement. Okay. You know, it's part of why I wrote my book Building your money Machine. I break it all down for you in there, the wealth priority ladder in chapter 12 and tell you exactly what to do with, with your money. This episode, I want to specifically talk to those of you that maybe in the 50s or 60s are heading that way. And I don't want you to be a statistic, see, because now all of a sudden time feels like it's limited. Time all of a sudden seems like, wow, wait a second, I can see it on the horizon. And so having a plan is important. So the very first thing I want you to sit back and look at is say, do I have a plan? I was sitting with a dear, dear friend of mine who was 60 years old and we just happened to be chatting and I said, hey, what are you going to do for retirement? And he looked at me, he says, I don't know, I haven't even looked at it. I don't have a plan, I don't know anything. And I said, what do you mean you don't have a plan? I don't even know how to do it.

I don't know what I want. Well, that's the first step is knowing what you want. But we sat down and I said, let's just talk about what you have, what you don't have, where it's coming from, where it's going, all that stuff. And I built what, what I typically build with my clients on in the Money Machine master plan. I built this whole plan out for them where they could see how things would, would play out. If the market dropped 30%, 20%, it, you know, if they retired early, if they worked an additional couple of years, if they took Social Security at 67, they took Social Security at 7. We tested it out a bunch of different ways and they could see where the probability of success was. And it was, you know, 77%, 85%, 90%. And then they sat back and all of a sudden you could just see the stress just come off his face and go, I'm not as bad as I thought. See, the plan isn't meant to stress you out. It's to give you the peace of knowing where you're at. It's to give you the peace that maybe you're okay. It's even to give you the peace that if you're not okay based on the plan, to know specifically what to do to make it. And so I think at this stage you absolutely need some sort of stress tested plan, like I did with him. It's a roadmap that accounts for all the unexpected to at least give you some comfort, whether it's market downturns, whether it's healthcare costs, whether it's, you know, extended lifespans, living till 90, living till 95, playing a bunch of what if scenarios. So you now have the opportunity to say we're good. And so it's, it allows you then also to say in order to make the plan a reality, here's the things that I need to do when I sit with my own wealth team and I can do my plans and I do, I run my own plan. They run a plan for me and we compare. But they will say for your plan to come to, to fruition, for it to be the reality, here's what we, you need to do. In other words, they tell me my role in making the plan a reality and they tell me their role in making the plan a reality. The purpose of creating a plan is to understand, become aware and to understand what your role in making a reality is. And then the investments will take care of themselves in that. So the detailed plan will show you these things because small, consistent actions will lead to big changes when guided by, by a solid, specific plan. Then whether you're 50 or 60, you still have a decade or more, two decades of, of working this to make that happen. Because a lot of people, when they start to think about retirement, they go, well, you know, I need a million dollars. And you think that on the day you retire you need the million dollars. You don't, because you don't need it all on the same day. You need enough to get you through that first year, then the second year, then the third year. And the plan brings that out. And so, so it's the first thing that I want you to start to look at is creating a plan. And if you're not working with someone like me or someone else to help build the plan, then do it on your own. Whether it's in a software Whether it's in a spreadsheet, whether it's on a pad of paper, it's about listing your sources of income, expenses, debt, understanding what is going on, what is where your money's going, coming in from, where it's going to the kinds of things that you have. So you know what you have to work with. Now I think that you should be at this stage working at a higher level than a spreadsheet because I want you to run multiple scenarios to see what happens if health care costs go up, what happens if, if you retire early, what happens if you delay Social Security? Well, that's hard to replicate in on a pad of paper. It's almost impossible in a spreadsheet. You need a robust software to make that happen. But nonetheless you need a plan because that without the clarity, you won't have the foundation needed to make the right choices to succeed. So that's the first thing is I think that you need a plan. Step two is that I want you to build an immediate safety net. I need you to have liquidity. You're going into years where your income might be limited, your income might be.

Reduced, it might be stopped. And so we need cash on hand, liquidity on hand to take care of the unexpected, to take care of things if we need it. That means that I need you to start making sure that you have what we call in building your money machine, a peace of mind fund. That is nine to 18 months worth of cash in a high yield savings account. I get it, it's a lot. Start with one month, start with three months, start with six months, whatever it is, but start. You gotta have liquidity because without the safety net you have nothing to protect you against life's curveballs. When, when the main water main out in front of my, my house broke and we had a lake in front of the house where it wasn't supposed to be. If we didn't have cash available, the only way to pay for it would have been to go into debt. And that's a big expense. And then you go into debt on a credit card at 29% completely destroys your ability to build wealth. So it is really important at this stage to get liquidity. That means that I'm going to cut out, I'm going to take, make some hard choices right now to cut out the things that I don't need so I can use it to build liquidity and build my wealth in the proper way. In conjunction with the plan. I'm also going to look around and make sure that I'm going to sell anything that I don't need. If I. Look, I owned a Vespa for a while. I was using it a lot and then I stopped using it. So why is it? Why it's just taking up space in the garage, set up selling it. You know, it didn't have a ton of miles, but that's the kind of thing that I think you need to do. I didn't sell it because I, because I needed the money. I sold it simply because I wasn't using it. Taking up space, what do I care? So I got rid of it. Put it. Get yourself in a position that you have some sort of safety net to cover you in these years. Okay, that leads me to step three. Step three. I want to talk about Social Security. I want you to maximize Social Security. It may be the only kind of retirement you have without the investment. So you may not subject to pensions. Now, let's be really clear. There's all this question, Social Care being going to be around. Is it? It's going to be around. Just question is at what capacity and what kind of benefits. Social Security is not enough to retire on. Let me be clear, it is, it is meant as a supplement.

You. When you look at the kinds of money you can get from Social Security, it's a couple thousand dollars, okay, it might be $4,000 depending on how much you've earned and the credits you have and thing, but, but still it's not enough for you to, to retire on. You need something on the outside, but it's still there. You need to think about it. You have the ability to declare claim Social Security early on, in your early 60s if you choose to. But when you do that, you have a permanent reduction in your benefits, which is fine if you choose to, but it's 70% of your overall benefit. Now this is a, it's a precarious thing because.

The only way to know when you should take Social Security is if you absolutely knew when you were going to die. Because if I knew when you were going to die, then I would say, hey, let's just look at how much you get over the rest of your life. If you take it at 62, if you take it at 67, if you take it at 70, then you know. But since we don't know when you're going to die and we want you to live as long as possible, then you just got to understand how Social Security works. If you take it at 62, you will only get 70% of your full benefit to get your full Benefit, you have to reach full retirement age, which is at 67. That gives you 100% of what you're entitled to, okay? If you then delay it longer, it increases your benefit by 8% per year. So if you wait till 70, age 70, instead of getting 100% of your benefit, you get 132% of a benefit. So think about it this way. If you're getting a $2,000 benefit.

At 100%, at 60, at 67, but then you turn around and delay that until 70, instead of getting 2,000, you get $2,640. It's an extra $7,700 a year. It's. It's. It's not small change. It. It actually helps. So here's what I want you to do. Here's the action step here. I want you to go to the Social Security website. My Social Security tool is there. I want you to calculate your benefits. In fact, better yet, what I would love for you to do is set up an SSA account online, download your Social Security statement, because it will show you the history of your income. I want you to verify that all that income is correct, because sometimes they're missing years. I had some missing years, and I had to get it adjusted. So you, it will tell you specifically what you're eligible for now, what you're eligible for when you retire. If you wait till 70, you will then get a clear picture of, of what to do with your Social Security. And you may look at it and say, I'm going to delay taking the benefits and claiming them for.

For the reason of increasing the benefits. Or maybe I don't need it. Or maybe, you know, whatever it is. And if you're married, just understand that there is a spousal continual benefit that can come into play also. So you want to be mindful of it. But it is something that you need to look at as an element in your journey into retirement, especially in your 50s and 60s. In doing that, that then leads me to step number four. So step number four, you gotta invest, y'. All. You cannot build a retirement if you're not investing. So I want you to start investing. I want you to invest wisely. Money. You cannot save your way to wealth. Think about this. If I put $5,000 a year away, starting. If I do it for 40 years, okay, $5,000 a year away puts $200,000 over 40 years. And I do it at an average rate of return of 8 to 10%. And I put it in an investment like an S&P 5 or 8 to 10%. By the time I, I get that 40th year, I'm about a million three to one and a half dollars. Not bad for a $200,000 investment. If I save it and I don't put it into investments, I only put it into, let's say a 2% savings account. The same $200,000 only turns into like $315,000. Huge difference. But the point is that you cannot save your way to wealth. You have to invest your way to wealth. That means that you have to be in the investing game. And it doesn't need to be complex, it doesn't mean complicated, it doesn't need to be problematic, it can be very simple. But I need you in the game, which means that there's some things I want you to do. I want you to make sure that if you are participating, if you have an employer that has a 401k and they match your contributions, you make sure you get the match because that's 100% return on your money and you will never get it anywhere else. Okay. Also, at 50 years old you have what's called catch up contributions, means that the youngsters, anyone below 50, they can only put away so much. But you can put away More in a 401k right now you can put away $23,000, but if you're over 50, you can put away another $7,000 approximately. So you got this catch up contribution, $7,500 you can put away so all of a sudd away over $30,000 a year in a 401k. And if your employee employer is matching a portion of it, then you're in great shape to be able to put that away. Now obviously we got to make sure that it's within the budget and you have can still live. That's why you have a plan.

If you have income levels at a level that make you eligible for a Roth, this is the time to consider it. Because the Roth will be completely tax free down the road to make that happen. Now that means you're going to fund these things, but you also still have to invest these things. At this stage, I don't want you investing overly risky. So I don't want you, you're not going into this thing and investing 100% into Bitcoin or you're not even going into it and investing 100% into a single stock. I want you over a diversified, low cost, low fee portfolio, a balance at this point of stocks and bonds that give you growth and stability. So you're going to look for a product mix or a mix in the ETFs. It could be a balanced portfolio. You can do a two fund, a three fund, a four fund portfolio. We talk about that in my investing simplified course. But.

I want you to be invested and not just savings. If you're unsure about this, one of the things you can do is there's two things you can do. One is get a robo advisor. That means you go to a brokerage house like a Schwab, a Fidelity, a Vanguard that might have Robo advisors. You'll answer the questions, they'll take in consideration your risk profile, they'll take consideration your current circumstances, your age. And they will recommend a portfolio structure for you of ETFs and index funds that are low cost, low fee, and you can put it that way. The second way you do it is just go into a target date index fund that is now you're looking at saying I need this money in 20 years, in 10 years. And you'll pick that date and they will manage the portfolio and it'll get more and more conservative as we get closer. But there's, if you're sitting back saying I don't know what to do, that's not an excuse because your retirement's coming and we got to figure it out. And it is not that. It's not that complicated. Simply this. First, decide how much you're going to put away, get it in the account. Second, we decide where we're going to invest it, couple of ETFs or index funds. If you don't want to do it yourself, go to a robo advisor and have them figure it out. Or do a target date fund. That's it. But now you're in the game. Now you're in the game. Okay, number five.

You know what? As much as you don't want to do it, we got to figure out a way to increase your income. Okay? You're going to, at this stage, if you don't have enough, you, you have to look at things and say, how do I increase my income? By either.

Earning more, getting paid more, additional work hours, additional part time work, consulting, freelancing, other side gigs, trying to, to make that happen, or delaying retirement knowing that you're going to work a few more years longer. I know it's not ideal, but it's the reality in doing this. I'll tell you this. My mom, we just lost her in September this year. She was 91 years old.

She had issues. She was six, six and a half years on dialysis. So she lived a good life. But I'll tell you, just her care in the assisted living and the care facility she was in at the tail end of her life was 15, 16,000. A month. A month.

So it can get very expensive when you start to live that long. And so it is important for us to make sure that we, we build this up in a way that, that makes sense. That means you might have to get an additional job for a period of time. You might have to do outside consulting or freelancing for a period of time. You might have to work longer hours. You might have to delay retirement and work more years. As much as we don't like it, that's the game that, that we're in. Then we get to number eight. Number eight is where I want you to look at leveraging other resources and making sure that you stress tested your plan. Okay.

You might have other avenues of getting funds, whether it's maybe you have a health savings account that you haven't tapped, those kinds of things that, that come into play. You can look for senior assistance programs, state and local programs around housing, health care, utilities, those kinds of things, and subsidies. I don't want you to do that because that tells me that we didn't do enough upfront. I want us to do enough upfront to make that happen. And there is a whole lot of advertising about reverse mortgages if you're 62 and above to use up your home equity. I'm not a fan of that either. It is a possibility, but I'd very, very cautious in considering that and, and looking at, there may be some resources out there for it. But by and large, I want you to be self contained. That means get a plan. That means build your income. That means manage your expenses. That means get in the game, invest and stay in the game. Okay, I, I get it. You're in your 50s and 60s and it feels like oh my gosh, it's coming. But here's what I know. It's not too late to secure your financial future. The key is having that plan in place, taking consistent actions, building those habits and being intentional with the steps that you take. Okay? If you want the detailed framework to make it happen, I want you to grab my book Building your money machine. But by the same token, I want you to stay on this journey with me. I'm here for you. I, that's why I have this channel. If you have not subscribed, subscribe. And bottom line is if you have friends that are on this journey, too. Why not invite them to go along? I'm not here to sell you insurance. I'm not here to sell you investments. I'm here to sell you on the dreams. I want to give you the unbiased, direct, you know, opinions of my 30 plus years as an advisor, but more importantly, of my 63 years of life and how I've walked this path, screwed it up, rebuilt it, built it for myself, built it for my family, built it for my son, and built it for my clients. I want that for you because I truly believe that financial freedom, it's your birthright. We just got to go claim it. And we live in a society, in a world where we're demonized for talking about money. Well, they can demonize me all they want. I'm going to talk about it every single day because I truly believe that it's your birthright and I want to help you go out and claim it. All right, so let's start today. Let's make sure you're on the right path. Let's give you the right guidance. If you have questions, you have comments, do me a favor, reach out to me. Let me know. Let's make sure. I'll bring it on the show. We'll get it answered. We'll keep you moving forward. You don't have to do this in isolation or alone. All right? And I hope to see you on the road to your financial freedom. And I can't wait. See you soar. All right. Until I see you in the next one. As I always say, always, always strive to live a life.

Thank you for listening to the affluent entrepreneur show with me, your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the affluent entrepreneur Facebook group now by going to melabraham.com group and I'll see you there.

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And that's it for this episode of building your money machine where we help you learn how to master your money, eliminate financial stress, and live a life of choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you do me a favor, go to Apple, Apple Podcast or wherever you're listening to this podcast and rate and review the show. It helps us transfer tremendously to keep us at the top of the list so we can continue to get this information and this message out to people. Because I truly believe that financial freedom is your birthright and I want to help each and every one of you claim it. Thanks so much.