You’re never too old to start investing

Typically, when I write about making the most of compounding, I talk about the power of compounding for someone starting at a young age. But what if you didn’t start young? What if you’re only now looking at investing at age 50, 55, or even 60? Is it too late to begin?

The simple answer is no, it’s never too late. Whatever age you might be, starting today will improve your situation in retirement compared with not starting at all. Every dollar invested has the potential to grow, and even a shorter compounding window can still make a meaningful difference.

Key takeaways

• It’s never too late. Starting in your 50s or 60s still improves your flexibility in retirement compared with doing nothing.
• Small steps add up. Modest, regular contributions can compound into meaningful support alongside New Zealand Super.
• Clear roadblocks. Pay off high-interest debt and build a buffer so surprises don’t derail your progress.
• Make the most of KiwiSaver. Maximise employer and government contributions to grow your nest egg faster.
• Invest with purpose. Align your investments with your goals, timeframe, risk tolerance – and seek advice if needed.

Why investing still matters, even later in life

Many people reach midlife without a dedicated retirement portfolio, often for good reason. Some have been focused on paying off the mortgage or raising a family, while others may be starting over after divorce, redundancy, or time out of the workforce. For some, ‘saving’ has meant money in the bank or term deposits – safe, but often lagging inflation.

Whatever the reason, you can still make meaningful progress from here. Even if you’re starting later in life, investing now can significantly improve your future financial security. The power of compounding – earning returns on your returns – still works, even if your investment time frame is shorter than someone who started in their 20s.

Any amount you build will help supplement New Zealand Super, which currently pays $627 a week before tax for a single person, or $476 per person for a couple.

It’s worth asking how this amount compares to your current weekly spend? For most people, the gap is significant. While some expenses may fall away in retirement – work, mortgage or child-related expenses – others remain, and many rise with inflation. Ongoing costs like groceries, electricity, rates, insurance, medical care, and home maintenance don’t go away.

That’s why building a financial cushion through investing can make a difference. For example, investing $50 per week from age 50 could grow to over $67,000 by age 65, based on a 7% annual return. Drawing down 4.7% per year would provide an additional $61 a week in retirement – potentially enough to cover the monthly power bill. Small sums like this add real flexibility.

The power of compounding

It’s also worth remembering that you don’t have to retire at 65. Delaying retirement even by a year means another year of earning, another year of contributions and growth, and one less year of drawdowns. Over time, that can meaningfully extend the life of your savings.

Where should you start?

Whether you’re in your prime earning years or rebuilding after a setback, the first step is to understand where you are today. From there, you can find ways to free up even small amounts to invest.

Think about the kind of retirement you’d like; when you want to retire, the lifestyle you’d like to maintain, and how long your money might need to last. Even at age 55, many people can expect to live another 30–40 years – plenty of time for investments to keep growing. Some practical steps to consider include:

• Don’t take on risk unless you are properly compensated for it. Take risk only when the return justifies it and it fits your goals, timeframe, and tolerance. You don’t need high risk to make progress – consistency matters more.
• Track your spending: How much income is coming in and where is your money going? Redirect small savings from things like subscriptions or takeaways into investing.
• Pay-off high-interest debt: Clearing credit cards or personal loans should be a priority. Every dollar saved in interest is a guaranteed return.
• Review your insurance: Cover is essential, but if your original need has passed you may be paying for policies you no longer require.
• Build an emergency fund: Setting aside three to six months of essentials gives peace of mind and reduces the chance of dipping into investments if unexpected expenses arise.
• Maximise KiwiSaver: At a minimum, contribute enough to receive full employer and government contributions. If your budget allows, consider investing outside KiwiSaver too, which provides flexibility before age 65.

Better late than never

There’s no such thing as being too old – or too far behind – to start investing. By taking small, intentional steps today, you can make a real difference to your financial future.

Starting today, no matter your age, is better than not starting at all. Even a shorter investment timeframe can improve your financial security in retirement, especially when compared to doing nothing.

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