It’s never too late for anything in life — not even to become a millionaire as you’re approaching your golden years.
While popular belief could lead us to believe that achieving that feat in your 60s might be unattainable, partly due to the shorter time horizon to accumulate wealth, experts argue that with discipline, the dream might not be too out of reach.
“Remember the good old days when a million dollars seemed like a fortune? Times have most certainly changed, but not your chances,” said Adam Nelson, founder and CEO of WORKHOUSE. “As a boomer, you’ve likely accumulated a wealth of experience, which, unlike your back, doesn’t actually depreciate with age.”
Nelson added that it’s never too late to learn about compound interest, and if you were waiting for the right time to start saving, while yesterday was the perfect day, “today’s not too bad either.”
According to him, age can be a surprisingly savvy ally in your financial journey — meaning that you’re potentially more skilled at dodging financial pitfalls and can make more informed decisions.
“Remember, Warren Buffett made 99% of his wealth after his 50s. So, if you keep these sentiments front and center, you’ll get closer to Tycoon status — with style, dollars and sense,” he added.
Here are some steps experts recommended to become a millionaire in your 60s.
The Biggest Challenge Is Time, so Take Advantage of It
As people in their 60s have less time for investments to compound and grow, this group of people really needs to focus on saving as much as possible and take advantage of opportunities such as IRA, 401(k) and HSA catch-up contributions, said Christopher Lazzaro, ChFC, founder and president, Plan For It Financial.
“This translates into an extra $1,000 beyond IRA and HSA limits, and up to $7,500 for 401(k)s,” he said. “To free up the available cash to do this probably means taking a hard look at your budget and seeing where it’s possible to cut or reduce discretionary spending.”
In turn, he recommended checking credit card statements for services on autopay like TV streaming services, gym memberships and other subscriptions.
“It’s common to discover you’re paying for services you didn’t even remember having,” he added.
Downsize
Another way to generate wealth rapidly is by downsizing. People in their 60s who have no or little left on a mortgage could always consider downsizing and monetizing the substantial equity they have built up in their home, which for many is the largest asset, Lazzaro said.
“With the potential for interest rate cuts in 2024, and pent-up demand for single-family homes, if boomers are not thinking about this as a strategy, they may want to give it serious consideration,” he said, adding that downsizing will not only unlock home equity, it will also translate into lower insurance, real estate taxes and other housing-related costs.
“Boomers would then have further available cash to funnel towards their goal of becoming a millionaire,” he added.
Spend Less and Eliminate Debt
According to Ryan J. Janus, CFP, tax and investment professional at Janus Financial, becoming a millionaire in your 60s takes a lot of the same foundational habits as building wealth at any other age.
“Simply put, we want to spend less than we earn and save as much as we reasonably can. Depending on how far away we are from ‘millionaire status’ and how much we want to accomplish that goal will determine how much more someone would need to save on a regular basis to get there,” Janus said.
In addition, he noted that people in their 60s are potentially in their highest income earning years, and it may be easier for them to save more if this is the case.
Another factor on their side: They had more time to pay down debts such as mortgages, student loans or car payments.
“By freeing up their cash flow by eliminating debt, they’ve given themselves the opportunity to accelerate their savings rate in the years before they ultimately decide to stop working,” Janus said.
Capitalize On Life Experience
Someone in their 60s is likely to have decades in a certain profession or hobby, and it would be worth seeking ways to monetize those either as a consultant, in an advisory capacity, or some other such scenario, said Peter Earle, senior economist, American Institute for Economic Research.
“America is one of the easiest nations in the world in which to start a business,” Earle said. “You’re never too old to take that shot, especially if you have a shared entrepreneurial vision with friends, associates or family.”
According to him, startup success as an older person has some advantages over younger folks, including more experience and not having the competing attention of young children or youthful pursuits.
“A new business venture in the hands of a more experienced, older person is likely to run with fewer distractions, more flexibility and more focus — which are clear advantages over new firms run by 20-somethings,” Earle said.
Choose Your Investments Wisely
If you are in your 60s, you have to choose the right vehicle to become a millionaire. And speculating in the stock market or metals, for instance, is just not going to do it, said Steve Davis, CEO of Total Wealth Academy.
“They must give themselves permission to succeed by being in a vehicle that can take them where they want to go. Real estate is that vehicle,” he said.
According to him, real estate accounts for up to 90% of the millionaires in America.
He noted, however, that this is not easy and requires you to educate yourself to do it correctly.
“You don’t have time to trial and error your way through. Take a course on real estate investing,” he said. “I have a lot of clients in their 60s that are just now beginning to invest in real estate. They are using their cash and even their 401ks and IRAs to build wealth. All without tax or penalty on their retirement accounts. Real estate, if done right, gets returns three times what the speculators are getting in the stock market.”
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