Building wealth after 50

If you are seeking to build a retirement income to take yourself through to retirement and beyond; the decade from age 50 through to age 60 is the most important period to save. For many, the family home has been paid off, the kids have left home (well maybe) and most are still at their peak earning period based on knowledge, experience and education.

Whilst we have been told to put 10% of our pre-tax income into their retirement funds, many of us have now come to the realisation that this will be insufficient for a comfortable retirement. We have to make changes and we need to make good decisions that are both growth orientated and tax effective.

We now live in a low-growth, low-interest rate world with stalled economic activity in many major economies. Most governments lack the foresight to properly plan economic growth any further than the next election cycle and this issue has been detrimental to long-term growth prospects.

The United States has a new president vowing to rebuild worn out and outdated infrastructure. Whilst this announcement in itself is a positive decision, many of us are wondering where the money will come from in an already indebted society.

But with economic activity comes opportunity; with correctly targeted spending on income producing assets the potential to purchase shares, bonds and convertable notes in infrastructure projects. No doubt complicated financial instruments are being drawn up finance such projects - we all remember the collateralised debt obligations leading into the GFC.

If bonds are being offered in infrastructure projects then they are well worth a look. Likewise, shares in engineering, construction, project management, utilities, building materials and maintenance companies are looking to leverage grown in major infrastructure projects in the next four years and beyond.

The US sharemarket has already fought back to rise above pre-2007 levels; the Australian sharemarket measured by the ASX200 is well below 2007 levels.

Technically, Australia never was in recession in the aftermath of the GFC as Chinese demand and not stimulus spending ensured the economy continued along unabated. Australian GDP recorded negative growth for the quarter mostly driven by the former economic powerhouse economic decline in Western Australia.

You can pour over macro-economic statements such as balance of payment figures, CAPEX, the unemployment rate, interest rates, currency prices to seek answers. Many just look out the window to see businesses closing, friends and co-workers becoming unemployed, declining property prices based on forced sales and prices falling to base their judgement on the economy.