August 5, 2021
Money Milestones for Every Decade
Financial goals to set as you look ahead.
When it comes to financial comfort, it is important to have a plan. Your plan should fit your lifestyle as no one-shoe-fits-all outline. These milestones are just general guidelines and blanket advice that can help you get started if you are unsure of what kind of money goals to reach for in different ages of your life.
20s:
It is never too early to start saving for your future. Learn how to budget and build an emergency fund. To build your credit, make sure you have a credit card on hand that you can easily pay off regularly. Also, consider investing if you have a job. At this point of your life, you should start contributing 10% to a retirement account- like a 401(k). You can then try to expand your investment portfolio from there, after doing plenty of research.
30s:
If you did not get an opportunity to start investing in your 20s, it is never too late to start in your 30s. Diversify your investments to make sure you have some money coming in from multiple categories. Continue contributing to your retirement, and in your late 30s, you should have saved at least twice your salary amount. If you haven’t tackled your student loans yet, make it a goal to pay them off before the end of your 30s. Depending what point of your life you’re in, you might consider buying a house and saving up for your children’s future.
40s
In your 40s, you might want to start looking for additional income sources, whether in the form of a raise, a new job, or by cutting expenses. You might consider figuring out some passive income by starting a side hustle. If you have a family, buying life insurance would help provide in case of emergencies; merely a precaution for funeral expenses or lost future earnings.
50s:
This is your chance to do some preretirement math to figure out what you’re missing from your retirement plans and catch up. You should also aim to have 4 or 5 times your salary saved up. Talk to your financial planner and they can help you define your goals. Your debts should all be paid off, with the exemption of a low-interest mortgage. Learn about Social Security, Medicare, and any pension benefits you might receive. You should also start planning out your will and the distribution of your assets.
60s:
You can finally start withdrawing from your retirement accounts, starting with the taxable ones. However, for every year you hold off on withdrawing, you get an 8% increase. Make sure all your debt is paid off as you wouldn’t want to spend any of your retirement funds on debt payments. Take this time of your life to enjoy retirement and pursue any interests you have.
These decade milestones are just a guide to help you if you’re not sure where to start when it comes to financial planning at different steps of your life. Reach out to your local bank and meet with a financial planner to help you get started regardless of which decade of your life you’re in.
