He worked diligently in the late 1950s on completing The Silmarillion, which, with the publishing of the Lord of the Rings, his publisher desperately wanted in print as soon as possible. The first road block came when Ace Books, using the pretty poor copyright laws in the United States at the time, published an unauthorized (and rather botched) edition of LotR. He was forced to abandon his work on the Silmarillion (and the rather extraordinary latest version Of Tuor and his Coming to Gondolin) to work on a second edition of LotR so his publisher could enforce US copyrights. That also included a new edition of The Hobbit to bring it more firmly in line with LotR. By the time that was done, he was now an old man and the creative spark ebbed.
But worst of all, he basically upended the entire cosmography of Arda, which required massive changes throughout the mythology, right back to the earliest chapters of the Silmarillion, in particular of the Ainur and their coming to Arda and the ordering of Arda, but with ramifications right up to the Akallabêth. The sickness and death of Edith, as well as his own age, doomed the entire project. In his Letters, you can see in his correspondence with son Christopher he knows full well that he is no longer capable of completing the work, and asks his son to complete it. Sadly, by and large Christopher was stuck with the only near-completed version from the mid-1930s, which was a very abbreviated chronology rather than a narrative, and the published Silmarillion is shadow of what the author really conceived.