The specifics of your financial plan and financial goals may not resemble anyone else's. Maybe you want to trek the globe after you retire while your neighbor plans to dive into full-time volunteer work. However, some shared steps can help get you on track for your future.
The number one financial regret for many people is not saving early enough for retirement. Here's a breakdown of key financial priorities to consider at each age.
In your 20s
- Establish a consistent income,
- Build (and live with) a budget,
- Eliminate debt (credit cards or loans),
- Enroll in health insurance, and
- Open savings accounts for big expenses and investment accounts for retirement.
Retirement savings goal: Some experts recommend having saved your annual salary or saving 15% of your pay.
In your 30s
- Fill your emergency fund with 3-6 months' salary,
- Eliminate additional non-mortgage debt,
- Create a will and get life insurance,
- Max the match on employer-sponsored retirement plans,
- Put 20% down on a home, and
- Start kids' education savings funds.
Retirement savings goal: Some experts recommend having saved 2 to 3x your annual salary.
In your 40s
- Maximize personal contributions to retirement accounts,
- Increase income (negotiate a raise or add a stream),
- Pay extra on your mortgage,
- Discuss your parents’ finances and estate plans, and
- Map out college payment options with your kids (without touching retirement savings).
Retirement savings goal: Some experts recommend having saved 6x your annual salary or making extra catch up contributions.
In your 50s
- Take advantage of catch up contributions,
- Get long-term care insurance,
- Check on your portfolio and diversify if necessary, and
- Revisit your will.
Retirement savings goal: Some experts recommend having saved 7 to 8x your annual salary.
In your 60s
- Make retirement plans and tweak based on what you can afford,
- Plan out a retirement income strategy,
- Decide when to take Social Security, and
- Finalize an estate plan.
Retirement savings goal: Some experts recommend having saved 10x your annual salary.
Important at every age
Planning is important at every stage of life and age. Talk with a financial professional who can help you adjust goals and strategies to your specific lifestyle.