Life is busy. From your twenties to the time you retire, there are several milestones you’ll hit and surpass: getting married, purchasing a home, having kids, changing jobs.
All of the big moments and changes in life require some degree of financial preparation. In fact, a lot of times being prepared financially will help you save money.
In order to help you keep track of where you should be, Putnam Bank has come up with a decade-by-decade look at financial milestones. It will give you a better idea of where you are and what you have left to do.
Give it a read, and then get in touch with us to see how we can help!
- Get a source of income- get a good job and continue to improve your skills
- Build an emergency fund- it should be 3-6 months of expenses stashed away in a savings or money market account
- Make a plan to repay your debt- it doesn’t have to be all at once, but shoot for having it paid off before your 30th birthday
- Start a 401(k) or IRA- yes, you need to start saving for retirement. For example, putting $150 a month into an IRA that earns 8 percent starting at age 25, you’ll have over $500,000 by age 65. Waiting until you’re 30 will net you over $180,000
- Increase your 401(k) contributions- by this point hopefully you’ve worked up the ladder a bit, so you have more money to save
- Save outside of work, too- maxing out your 401(k) contributions? Nice! Now look into opening an IRA outside of work to save more
- Invest- don’t put all your eggs in one basket; invest wisely by diversifying
- Be liquid- yes, you need a certain amount of investments, but by now you may have a family and kids. Accidents and emergencies happen, so you need readily available funds
- Continue to max out savings- make sure your taking maximum advantage of your 401(k) and outside IRA. If you have kids, this is the time you may have to begin thinking about their education or other expenses, so having enough saved up goes a long way
- Get some advice- talk to a financial planner or trusted investment manager about your investments. It may be wise to reduce the percentage of assets in stocks and put them into bonds
- Play catch up- catch up contributions for your 401(k) allow you to save $5,500 more once you turn 50; this could be more if you can get a company match too!
- Consolidate 401(k)s- one manageable IRA is easier to oversee then multiple 401(k)s with varying amounts of money in them
- Look into long-term care insurance- daily care in a nursing home can burn through retirement savings quickly, so it’s better to be prepared
- Think about Social Security- you can apply for Social Security benefits starting at 62, but your monthly check will be smaller for the rest of your life
- Reassess retirement costs- we all think we can live on less, but most people badly underestimate health costs and other expenses
The rest of your life- take advantage of being smart with money your whole life!
Remember: the best time to prepare was yesterday, the second-best time is now. Make sure you are on track and prepared for your future. Get in touch with us today to see how we can help!
Putnam Bank, Equal Housing Lender and Member FDIC