FINANCIAL CHECK-UP | Stability | Your Forties & Fifties
During your forties and fifties, most individuals start to feel comfortable with their finances and what their future entails. This is often a time when your income is rising and your debt is paid or almost paid. By now, you should have developed some savings and the expertise to make sound choices.
At this time, it’s a turning point for most people. It’s a time of peak earnings. Additionally, people are halfway between entering the workforce and the traditional retirement age. How you invest and save for retirement can strongly impact your future assets. If you have not done some of these things already, it’s time to get started.
MONEY IN YOUR FORTIES & FIFTIES
The amount of money you should save in your forties and fifties is unique to your lifestyle. Ultimately, it will depend on how much you make, where you live, and what your expenses are like. You can reach savings goals by creating specific target amounts and dates.
Making room for all of your financial goals can be challenging. The good news for investors in their forties & fifties is that you’re heading into your peak earning years.
HOW MUCH SHOULD YOU SAVING
So how much money should you be saving? Of course, there’s no exact figure, but a good target is 15% of your income. Are you already saving 15%? If not, do you have to catch up?
At this time, forty-year-olds should have 3x while Fifty-year-olds should have 6x their salary in their retirement. Additionally, it is recommended that by forty, you are consistently saving 15% of your salary over the course of your career in order to be prepared for retirement.
Also, another option to helping grow your savings is a Roth IRA account. After you contribute to your retirement, a Roth should be your next option, which offers tax-free withdrawals. This means your investment gains will not be taxed. With a Tradition IRA, the amount is tax-deferred and you will pay taxes on withdrawals.
WHERE SHOULD YOU BE IN YOUR FORTIES & FIFTIES
- Emergency Fund is Established & In a High Yield Savings Account
- Debt Free
- Saving for Retirement
- Estate Planning & Trusts Established
- Have your Will In Place
- Life Insurance Obtained
- Disability Insurance Obtained
- Meet or Have a Relationship with a Financial Professional
- Maximize Your Company Benefits
- Save For or Own a Home
- Track Joint Expenses
- Open A Checking
- Personal Loans
- LIFE Manager
- Holiday Savings
- Pearl Hawaii Wealth Advisors
- Retirement Funds
- Refinancing Loans
- Retirement Calculator
UPGRADE YOUR CAR
UPGRADE YOUR FAMILY
- Teen Debit & Checking Account
- Open a Teen Debit & Checking Account
- Momi’s Money
- Open A Momi Money Account
- What Is A Coverdell Education Savings Account?
- Financial Literacy
UPGRADE YOUR HOME
- Purchasing A Home
- Mortgage Application Checklist
- Making a Down Payment on a House
- To Buy Or Not To Buy
- Home Loans
- Home Money Smarts
- Selling a Home
UPGRADE YOUR SAFETY
- Free Credit Report
- Federal Trade Commission: About Free Credit Reports
- Avoiding Inappropriate Investments
- Health Insurance Options
- Dealing with Illness
UPGRADE YOUR SPIRIT
- Financial Freedom & Getting Out Of Debt
- Develop Positive Financial Habits
- Financial Wellness Assessment
- As your income grows, look for investments and savings plans that shelter some of it from taxes.
- See a financial planner and figure out exactly how much you’ll need to have saved to maintain your lifestyle in retirement.
- Review your investment allocation to be sure you are still well diversified.
- Review your will and estate plan.
- Pay off your debts.
- Depending on the going rates for different types of investments, it may or may not be wise to pay off your mortgage now.
- Maximize your savings for retirement.
- Make sure your growing assets are protected by insurance.
Are You Ready?
Overall, keep in mind that everyone’s savings goal and path are different. There is no right amount or correct way to save. Generally, what matters is what is right for you and what you are comfortable with.
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