Building up a strong financial backing is a must for any individual. Wise financial decisions from an early working age will help you create a well designed plan that will allow you to reach your financial goals. 2019 is the perfect year to start making such financial decisions and attain financial security for your life.
Financial decisions are steps in life that should be taken in a cautious manner. Some of these decisions should be taken after much deliberation and consideration, while some must be taken simply because there’s an opportunity for it. This article aims to bring to you some great financial decisions that you should take when in your 20’s, 30’s, 40’s to 50’s, and the time just before your retirement during the age of 50’s to 60’s.
Financial Decisions to Take When in Your 20’s
The first thing that you should invest in when in your 20’s is to direct your money into equity investment. This form of investment preferably has a tax advantage attached to it and is available in the form of lucrative retirement accounts. The best thing about equity investment is that it provides a considerable scope to the money that you have invested in it to compound at an exponential rate over time. When in your 20’s, you’ve got nothing but time.
Let’s consider a hypothetical situation whereby you start investing into an equity retirement fund from the age of 25. Let’s keep the amount that you deposit into the account at $5000 and the timeline as 10 years. So you stop investing or putting in even a single dime into your retirement equity account after the age of 35 and don’t even touch it again till your retirement. Carefully considering the interest that such funds provide along with an estimated retirement age of 65, after 30 years of stopping your investment, you would have an amount of $562,683 inside your retirement fund with absolutely no action taken on your part after the age of 35. If you continue to deposit in this account till the age of 40; at the age of 65 you will have $1,068,048 to your name.
Keeping aside equity investment, another thing that you must focus on during your 50’s is building up your savings. Think of it as an emergency fund for a rainy day. There are a lot of unforeseen circumstances that might arise in a person’s life that might render him unable to earn money for an extended amount of time. It might be an ailment or a disability, which might take some days out of the earning roster. It is necessary to have enough funds for a period of such emergency. With statistics pointing out that as many as 25% of people have been found to be facing such problems in their lives, with close to 5% not being compensated by Worker’s Comp because their disabilities were job related. According to a study by Money, as little as 13% of millennials, are insured by disability insurances.
Financial Decisions to be Taken in Your 30’s
By the time you are 30, you might already be married and have started your own family. Due to this change, you’re spending is supposed to have increased as compared to the days that you were single. Trying to get you ahead in the achievement of future financial goals, being a little cautious about the present is also required at this age. Creating a power of attorney and a will are some of the things that should be tackled when you reach this point in your life. You never know what tomorrow brings and therefore it is always better to be prepared. Investing in a life insurance policy, which has a timeline before it needs to be renewed, or one that is permanent, are also important financial decisions that should be taken in your 30’s. Life insurance gives your family a major backing in case something bad happens to you.
Financial Decisions to Take Between Your 40’s and 50’s
By the time you have come to the age between your 40’s and 50’s, your spending will once again increased exponentially. This is because you have your family expenses, care for your aging parents, and a wide number of other responsibilities that you need to look after.
Your children are also starting to grow and would soon need college tuitions. Starting a college fund at this age so that you can pay for your child’s college is a good start. Investing in a LTC Insurance if you belong to a middle class lifestyle is also a great idea for securing care for family members with old age. Taking care of all of these expenditures, while also being able to tackle the plans for your retirement can be a tough nut to crack. Taking the advice of a financial advisor is the best choice during such times. Financial advisors or professionals are great at providing you with the best solutions while also giving you a comprehensive assessment about where you stand financially at the moment. Trust Point Financial Advisors are the best choice for this job, with their many years of experience and expertise.
Financial Decisions to Take During 50’s and 60’s
Catching up with your contributions for your retirement account is a wise decision to make when you are in your 50’s-60’s. You are just at the doorstep of your retirement and decreasing risks should be the first priority at this age. Reducing debts and other financial burdens that you might have must be completed before you retire. Having to pay for debts after being retired can prove to be a strenuous task and therefore needs to be resolved during this time period.
Financial decisions are very important and need to be made with great insight and caution. Taking the help of a financial advisor who is well versed with the way the system works is necessary for securing success with your finances. Investments like equities are very volatile and need to be handled with caution and care. A financial advisor would be able to provide you with the best suggestions when it comes to making great financial decisions in a world of low interest rates and high inflation.