How to Rethink Investing Risk When You’re in Your 50s
When you’re in your 50s, it can feel like you’re standing at a financial crossroads. Retirement isn’t a far-off idea anymore—it’s just around the corner. That can make “playing it safe” with your investments feel awfully tempting. But here’s something I want every woman to know: playing it too safe with your money can be just as risky.
So how do you find the balance that’s “just right” for you? Let’s walk through it.
What Is Risk Tolerance, Really?
Risk tolerance is a blend of two things:
Emotional risk tolerance: How much up-and-down market movement can you handle without losing sleep or panicking?
Financial risk capacity: How much risk does your situation actually allow you to take?
The key is, these two aren’t always in sync—especially in your 50s. You may be able to handle more risk emotionally, but your timeline is shorter. Or you may feel nervous about risk, but your financial situation can handle some ups and downs.
Why Risk Tolerance Changes in Your 50s
Retirement is closer than ever: It’s natural to want to start protecting what you’ve worked so hard for. But keep in mind, retirement can last 30 years or more. Some growth is still essential.
You might be more financially confident: After years of investing, many women feel steadier during market swings. That’s a sign your emotional risk tolerance may have grown.
Life transitions impact your outlook: Divorce, widowhood, inheritance, or even a career pivot can shake (or sometimes strengthen) your comfort level with risk—even if your finances remain strong.
The Real Risk of Playing It Too Safe
A little caution makes sense, but pulling out of the market or keeping everything in cash can seriously backfire:
Inflation eats away at your purchasing power (and these days, we’re all noticing those rising prices).
You could outlive your money if you don’t allow for some growth.
Emotional decisions—like selling during a downturn—can lock in losses.
How to Find Your “Just Right” Mix
Ask yourself these questions:
How long until I need this money?
The longer your time horizon, the more room for growth you have.
Could I sleep at night if the market dropped 15%?
If not, you may need more balance between growth and safety.
What are my true goals?
Think about retirement age, lifestyle, legacy, and more.
This is where asset allocation comes in—having the right balance of stocks, bonds, and cash that fits you.
A Final Thought: Risk Isn’t a Four-Letter Word
Taking smart risk, guided by a real plan, isn’t reckless. It’s a way to build your future with confidence. When you’re clear on your goals and supported by a trusted advisor, you don’t have to fear the unknown.