Time marches on and each decade is packed with change, different needs, plans, and goals. Things you strive for in your 20’s will be quite different as you leap toward your 50’s and beyond. We can’t see the future, but we can make a plan that will have us reaching for our personal stars and making strides toward the goals of each phase and decade of life. So, step on board and let this be a guide to prepare and plan for your future financial twists and turns that lie ahead.
As you approach and enter into your 20’s you are stepping into adult reality. It’s time to be well into your career choices or working towards them. You’ll be graduating, interviewing, and getting invested in the rest of your life. When you land your first real job, set up a 401k if it’s offered. Get a life insurance plan in motion while you’re young and rates are lower. Save for down payments on a home and car. Put money away for starting a family and college funds for your future kids. Work hard towards building your credit which will, in turn, make purchasing those big-ticket items a much smoother process. Start saving for retirement. It will come sooner than you think! Here is a retirement calculator to help estimate what you’ll need to save depending on when you get started. The sooner you start, the more you’ll have to enjoy your work-free years!
As the 30’s suddenly creep up, you are most likely in your own home, whether purchasing or renting. Student loans, personal loans, car loans, and other debts should be close to their pay off which will allow your credit score to climb. You may have started your family which brings us to the issue of making a will. You’re still young and this isn’t something we like to think about. Being responsible now can ensure what you have built and continue to build winds up in the hands of those you choose if the unthinkable should occur. You’ll feel better knowing this is taken care of as you continue to save.
In your 40’s, if you have handled your finances and decisions well, you should be seeing many overall goals met and settling into a deeper level of comfort. Hopefully, you saved for your kid’s college funds and can enjoy them beginning their journey towards their own goals. Now is a good time to reassess any investments and make tweaks and changes if they aren’t going as well as you expected. Life insurance could and probably should start in the 20s but if you don’t have it, take care of that now. The last thing you want is to leave behind a spouse or children filled with grief and topped off with financial burdens. This will be an investment in your family’s future rather than being a hard, painful setback for them.
Moving along to your 50’s, now is the time to start thinking about retirement. It’s not quite here yet but preparations need to get serious. The IRS will allow you to start making additional contributions to your retirement funds. Now is the time to start mulling over how you want to spend your retirement and where. As you begin to make vague plans you will have a clearer understanding of how much money you will need for a comfortable retirement. Then continue to strive for those goals. Plus, your children are likely beginning their adult lives and you may decide you want to give them a little boost. Be sure to consider those options while continuing to be wise about your own needs.
The 60’s, also known as the golden years, have arrived and hopefully, you have saved adequate “gold“ to enjoy the season you have worked so hard for. The transition into yet another new phase of life will soon begin. It is recommended that you have approximately eight times your annual salary saved at this point. Some seniors choose to downsize and live a simpler life which of course will be less expensive than continuing previous, more extravagant lifestyles. Sometimes retirement isn’t all the glitz and glamour it was thought to be. Many become bored and miss having extra cash in their pocket. If this is you, a part-time job is always an option to fill empty hours of a suddenly less busy life and help ease the transition into the world of retirement.
By planning ahead, being prepared and staying smart, apart from unexpected catastrophes, you should be well prepared, stress-free, ready to relax and reap what you’ve so diligently sown!