20s

Your earnings are at their lowest and financial demands are high, especially if you’re paying off a student loan. Just remember, right now you have the biggest advantage an investor can ever have — time. Your focus should be less on the size of your financial nest egg and more on building good financial habits. If you create a wiser way of thinking about your money now, it’ll seem like second nature later — and pay off big time down the road.

• Track where your money is going, then make a budget to start making it go where it should.
• Build a rainy day fund of at least $1,000 and up to three months of living expenses by opening an account and creating an automatic transfer each pay period.
• Start contributing to retirement accounts as soon as you get that first paycheck. The amount doesn’t matter. Starting is what matters. If you have a 401(k), try to contribute at least enough to get your full employer match, otherwise you’re letting your employer keep part of your compensation.

30s

Your income is starting to ramp up, but so might financial considerations like buying a house, getting married, or having kids. If you put off investing in your 20s, your 30s are when you need to stash money away. You’re still young enough to reap the rewards of compound interest, but old enough to set aside more for tomorrow.

• If you’re not there yet, get those retirement contributions up to 15 percent of your salary by increasing them one to two percent each year until you get there. Contributing to your retirement should be a top priority by now.
• Protect your most precious asset. Take a look at disability insurance to make sure the bills get paid if you get sick or hurt. You don’t want to have to dip into the retirement reserves you’ve worked so hard to build.
• Make sure your life insurance (and your spouse’s, if you have one) can provide enough funds to ensure that anyone who relies on you isn’t left in a bind.
• Ease the anxiety of paying for college tomorrow by starting a 529 college savings plan today.
• If you haven’t set up a living will, a health care proxy, and power of attorney, now’s the time. If you already have them set up, review each for potential updating.

40s

You’ve reached the halfway point to retirement. These are your peak earning years, so make sure you’re doing all you can with the dollars you have coming in.

• Heighten the hustle. The closer you get to retirement age, the harder you should be working to max out those retirement contributions. You may also want to start thinking about adjusting your portfolio – not only the types of investments you’re holding, but the types of accounts and how they’re taxed.
• The more debt you can get rid of now, especially higher-interest credit card and personal loan debt, the more you’ll be able to concentrate on saving for your future.
• Check in on mom and dad. It’s a tough conversation to have, but it’s important to know if their financial plan is as sound as your own. Nearly one-third of adults end up providing financial support for their parents.

50s

Retirement may now be in sight, but you’re not there yet. Making the right moves now can decide the financial success of your golden years.

• Once you hit your 50s, you can save even more tax-deferred or tax-free dollars in IRAs and health savings accounts. Try your best to take advantage of every break Uncle Sam gives you.
• The great unknown in retirement is medical costs. One way to make sure an unexpected illness doesn’t blow a hole in your nest egg is long-term care insurance. Policies you can buy now may be unavailable or unaffordable in your 60s.
• Take another look at your retirement fund allocation as time to retirement gets shorter. It may be time to start that shift from wealth accumulation to wealth preservation.

60s and beyond.

Just because you’re closer than ever doesn’t mean you have to retire. It’s up to you to weigh the obvious financial advantages of working longer with the emotional advantages of finally being able to kick your feet up and enjoy the fruits of a lifetime of hard work.

• As retirement looms, start shifting out of aggressive investments into more conservative ones to reduce your risk and make those precious savings last as long as possible.
• Decide when to take Social Security. The age at which you’ll receive full benefits depends on the year you were born. If you take benefits before you reach full retirement age, they’ll be lower than if you wait.
• Sign up for Medicare. It’s available to anyone 65 and older. The optional medical portion of the insurance carries a premium.

No matter how old you are, it’s always the right time to take control and create a more sound financial future. As always, it’s a good idea to have an experienced team in your corner to make sure your financial plan ages with you.

For more than three decades, Cobblestone has been a trusted partner to individuals, families, and institutions. In the same way distinctive cobblestones are thoughtfully assembled to withstand any conditions, we provide the breadth of services, depth of expertise, and team approach required for resilient financial stewardship.

DISCLOSURE: Cobblestone does not provide tax or accounting advice; clients should also consult with licensed professionals in that field.

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