Achieving your financial goals and obtaining the retirement lifestyle of your dreams takes careful financial planning.
As you get older, your financial needs and demands shift. The key to your long-term financial success is to balance immediate needs with your long-term goals.
Learn about the common primary financial concerns at every stage of your adult life and the future needs you should consider.
In Your 20s
Between the ages of 20 and 30, you’re just getting started with your adult life. Your primary concerns are paying your living expenses. If you’re like many young adults, you’re also probably spending a considerable portion of your earnings on luxuries like dining out and entertainment.
At this stage, you need to limit these luxury items and begin saving for your future needs, such as buying a home and starting a family. Ideally, you should also be contributing to an employee 401(k) plan for your future retirement.
In Your 30s
Between the ages of 30 and 40, you’re growing your family and your career. You’re likely spending a good deal of your income on mortgage payments as well as devoting resources toward the costs of raising young children.
At this stage, your income should be growing, and you need to devote portions of it to building an investment portfolio and increasing your 401(k) contributions. If you have children, you should set up college savings plans for them to help offset their future education expenses.
In Your 40s
Between the ages of 40 and 50, you’re preparing to put your children through college and beginning to consider retirement.
At this stage, you should maximize your college savings plan contributions if you haven’t already. You should also continue to increase your 401(k) contributions and begin diversifying your investment portfolio.
In Your 50s
Between the ages of 50 and 60, the prospect of retirement is becoming more real. Your children are either in college or finished with it. Your income is likely at or near its peak.
In your 50s need to have a heavy focus on wealth accumulation. Continue to diversify your portfolio and consider making less aggressive investment choices as you move closer to retirement. You should also take advantage of the extra $6,000 per year you’re now able to contribute to your 401(k).
In Your 60s
Between the ages of 60 and 70, you are preparing for and possibly transitioning to retirement.
At this phase, you’re shoring up your assets. If you own a business, you should be planning your exit strategy and how the transition from the business will affect your retirement.
You should also be carefully considering (or reconsidering) your retirement age, as the exact age at which you retire can affect both your 401(k) withdrawals and Social Security payments. There are thousands of different Social Security strategies. Finding the right strategy for your unique needs and goals has a significant impact on your financial planning.
In Your 70s And Beyond
During your retirement, if you’ve planned and invested properly, you’re enjoying the life goals and hobbies you planned for. You should be carefully monitoring your retirement spending to make sure you’re not exceeding your planned withdrawal rate.
Later on, you’re using your assets to pay for the best support systems you can afford and planning for your legacy.
The Key To Strategic Financial Planning Is Starting Early
To enjoy success and prosperity at every phase of your life, you need to start your financial planning as early as possible. Work with a financial advisor to outline and build an investment plan for each of your goals, accounting for how your financial needs will evolve along the way.
With an early start, you have the time to properly build your assets and pivot as needed for any sudden shifts in the economy or your immediate financial situation, which helps ensure you’re able to live out the retirement of your dreams.
Learn more investment strategies to help you achieve the retirement of your dreams. View Our Dream Lifestyle Retirement Video Series.
