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When you are in your 40s...
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Your goals likely include:

  • Retiring remaining debt, including student loans
  • Building an Emergency Fund
  • Buying a home if you have not already done so
  • Investing for Retirement
  • Saving for children’s education

If you have not made a commitment to live debt free by now, it is time to get serious. Credit cards charges should be paid off in full each month or enforce discipline by only spending cash. Develop a plan to pay down debt. Make sure that your disability insurance coverage is keeping pace with your income. If you have a family, ensure that you and your partner have sufficient life insurance. If you have children, saving for their education should be considered only after your retirement goals are completely funded. You can’t borrow to retire, but your children can take loans to go to college. Continue to pursue opportunities to advance your career. Consider using half (or more) of every raise to increase savings for retirement, emergencies or other goals.

Assuming that you have enjoyed career advancement and haven’t upgraded to a McMansion, your housing costs should now be below 25% of gross income. Use this extra cash flow to supplement retirement and other savings, insurance coverages and then college savings. If the money permits, it’s okay to have some more fun, too!

Am I on track with retirement savings?

Can I afford more home?

 

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