The Folk Alliance and similar music business conferences will give you insights into how successful career musicians make their living. It sounds crude but,you have to sell yourself. There is a lot to it if this is going to be your only source of income - so keep your options open. A recording is a must and a producer is advised - someone with experience and taste to get you off to a good start. Exposure is of ultimate importance- you have to show up in the public eye and ear often. Most of the folk artists I know are very highly motivated, hard working but often cannot make a living just from performing. They do other musical jobs -play in a few different bands or groups, give lessons, play recording sessions, dances, schools, and often have unrelated jobs to make ends meet. You are over 40 - it is going to be more difficult to get noticed because the festival directors are looking mainly for good young talent - and there is a lot of it out there these days, but your music wins out if you have what it takes to get noticed.
Work hard, follow your dreams - good luck!