As you experience all the stages of life, so should your financial and protection coverage. Below are some perspectives to consider and discuss with your financial specialist.
20s
Be smart about your debt
Begin good savings habits
Establish good credit
You’re most likely transitioning from the years of studying and college parties to starring down the barrel of your tuition debt. The last thing on your mind might be planning for your retirement.
But did you know that 1 in 4 of today’s 20 year-olds will become disabled before they retire?* How do you build your retirement while protecting your income?
Working with a financial representative that understands both retirement and protection can help you establish good habits and a foundation that will pay off when life gets even more hectic!
Develop your financial intelligence. Your 20s can be overwhelming with establishing your financial intelligence while needing to pay off loans and credit cards. This is the time to get your act together. Figure out where your money's going, come up with a plan for spending and saving it by paying yourself first and regularly monitor your execution of that plan.
Start an emergency fund. Begin putting aside money in a risk-free savings account that you'll be able to easily access in case something happens, such as a serious illness or job loss. Hunt suggests setting a goal of six months of living expenses.
Open a retirement savings account. If you think you’ll just wait to start saving for retirement, look at how quickly the last 5-10 years went by then look down this chart at the 40 to see the added cost that are approaching your future. Begin paying down those credit card and school loans debt but don’t put off beginning your wealth building. Beginning to save and plan (even a small amount) gives you an advantage and that is you’re able 20’s does have some great opportunities to take advantage of compound growth.
— You can learn more about strategy in our Precision Strategy Learning Section —
30s
Create a Budget and wealth building perspective
Understand and establish insurance coverage
Consider buying a house
You’ve reached your thirties and can go back to that high school class reunion showcasing all of your hard work! But there’s new change and more planning that needs to be established in your protection and wealth building.
Fully fund you’re a retirement plan. Now that your career's on course, it’s time to really begin looking at a full retirement plan. Set up automatic deposits so you don't have to think about it. Do you need to plan for your children’s college education? There are ways to pay for college and not impact your retirement income. Search out your options.
Buying a home. Since you've been saving through your 20s, you should be able to use some of that money for a solid down payment. Learning and understanding how to be efficient with your money when it comes to the rationale between a 15 year and 30 year payment is important.
Don't succumb to consumer debt. Your 30s are typically the time when you're having children and settling into a home, which can mean a lot of spending and racking up debt. Beware of lifestyle creep, and stay focused on keeping your debts down. Inflate your savings not your lifestyle.
Ask the hard questions: You have kids, a house, and responsibilities. Plan for the “what ifs” by insuring what you have. Homeowner’s insurance, health insurance*, disability insurance* and life insurance: they’re all crucial.
— You can learn more about strategy in our Precision Strategy Learning Section —
40s
Review your portfolio
Revisit your Savings and Wealth Building strategy
Reinvest in yourself
This is usually when people realize that they're either doing pretty good -- or they're behind and start to get freaked out.
Make retirement savings your main goal. In this decade, even though your kids are nearing college age, you want to avoid prioritizing saving for their education over your retirement goals. As much as you’d like your kids to have a hefty college account waiting for them on graduation day, don’t save for them at the expense of your retirement. Bottom line: You can always borrow for your child’s education, but you can’t borrow for your golden years.
You’re just entering the Sandwich Generation years, which means you’re likely juggling your kids’ needs, your parents’ needs and your needs all at the same time. Still, it’s imperative to try to pay yourself first. It’s a normal reaction to focus on the kids but this is why it’s a good thing that retirement tops this decade’s list. Just remember you’re not alone so it’s a great time to work with a financial representative that can show you options for incorporating a good balance.
Scrutinize your retirement plan every couple of years. If you have been saving and investing, this is not the time to become complacent. Step back and really look to see where your path is going. Make sure your retirement savings are living up to your expectations. You may have more expenses than ever; still, it’s important to keep in mind that every dollar you save now can potentially earn you as much as $10 in retirement income.*
— You can learn more about strategy in our Precision Strategy Learning Section —
50s
Prepare for kids moving out
Review insurance plans and begin thinking about long term care
Review your portfolio
In your 50s your kids are hopefully transitioning out of the nest so you might focus on building up your emergency savings with more than six months of take-home pay. A strong goal is to build up to a year or two’s worth.
The good news is you can take advantage of catch-up contributions. Check with your financial representative for details. Keep in mind, though, that the IRS has specific catch-up limits that apply to individuals 50 and older.
Eye on the finish line of retirement! Your retirement plan should be your first priority now. Revisit your “estimated future living expenses” with your financial representative and determine what you’ll have and need when you retire.
Have you consolidated yet? If you have worked for several employers over the years and have accumulated a number of smaller plans, consider consolidating them. This will give you a clearer picture of your plan’s overall performance. It can also make managing your portfolio simpler and easier.
And always remember…
Protect your loved ones: Make sure the beneficiaries on all your accounts are up to date. If you don’t already have one, create a will. And determine if your life, disability and homeowner’s insurance provides enough coverage for your family’s needs.
— You can learn more about strategy in our Precision Strategy Learning Section —
