The Motley Fool

No savings at 40? You still have time to build a million-pound portfolio

If you haven’t built any retirement savings by the age of 40, it’s not the end of the world. You still have at least 25 years to build a big enough investment pot to retire comfortably, but you really do need to take action now. Don’t delay any longer, because the years soon pass.

Action this day

If you’re lucky enough to have a workplace pension employer contribution, this is where your retirement planning should start. At the same time, you shouldn’t rely only on that. You need to build a separate fund of savings under your own steam, and one of the best ways is investing in a Stocks and Shares ISA.

Claim your FREE copy of The Motley Fool’s Bear Market Survival Guide.

Global stock markets may be reeling from the coronavirus, but you don’t have to face this down market alone. Help yourself to a FREE copy of The Motley Fool’s Bear Market Survival Guide and discover the five steps you can take right now to try and bolster your portfolio… including how you can aim to turn today’s market uncertainty to your advantage. Click here to claim your FREE copy now!

You can set one up quickly and easily with a host of low-cost investment platforms, load funds with your debit card, and start trading immediately.

Many investors will be wary of today’s stock markets which, despite have enjoyed a 10-year bull run, are menaced by coronavirus-related issues. The first thing to say about that, is investors always have something to worry about. If it wasn’t the virus, it would be the US trade war with China, Middle East tensions, slowing growth, and so on.

If you use short-term worries as an excuse not to invest, you’re likely to find yourself have no savings at 50, either.

Think long-term

Also, experienced investors turn bouts of political and economic uncertainty to their advantage, by taking the opportunity to pick up stocks at reduced prices. History shows stock markets always bounce back given time, so you should aim to buy shares both through thick and thin to generate the best returns.

If you still feel nervous, set up a regular monthly direct debit to your online platform, because that way you don’t have to worry about short-term noise, as you spread the risk by investing steadily throughout the ups and downs.

Now I’m being ambitious in this article, with talk of building £1m portfolio in 25 years. But it can be done, provided you are willing to pump enough money in. Assuming stock markets grow at 7% a year, you can get there by investing £1,250 a month.

Stick with it

If you have 30 years, you can reduce that to around £833 a month. That’s still a lot, but don’t despair, because, at 40, you may have built up some investments which you can put towards your total. Also, even if you don’t make a million, by putting aside all you can afford from spare income each month, and increasing your contributions when you have pay rises or bonuses, you may get closer than you think.

Even if you fall short of a million, you’ll still have a much bigger nest egg than if you never tried at all, making for a more comfortable retirement. Better still, your ISA savings are free of tax.

The alternative is to do nothing at all. In 25 years, you’ll kick yourself.

A top stock with enormous growth potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business.

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has been helping it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 alone it returned a whopping £151.1m to shareholders in dividends and buybacks!

And here’s the really exciting part…

We think now could be the perfect time for you to start building your own stake in this exceptional business—especially given the two potentially lucrative expansion opportunities on the horizon that our analyst has highlighted.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Stock… free of charge!

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.