Do you have an idea of what is the best money advice for every age range? I was given a cool article sponsored by fidelity and written by Forbes magazine about what money strategies you need to make in every decade of your life. Beginning in the 20’s all the way up until your 60’s. The premise of the article is how to retire rich by having a long term game plan. Everything in the write up is what many bloggers including MoneyWatch101, have been saying for a while now, become an expert with personal finance to achieve a better than average retirement. It is of no use to constantly repeat the same content to all of you, so now I will give you a different twist and tell you what you need to do in every decade of your life. Granted you do not have to hold off on things because they are mentioned in say the 40’s age range and you are in the 20’s, this is a mere guideline and you can complete them as fast as you desire too.
First before anything you have to find the passion your soul needs to feel fulfilled, and somehow make money off the said passionate work. It will possibly shorten the time frame to reach financial independence and can save you a costly work transition later. Obviously you cannot control when you get the calling to do what you suddenly love to do as a career path, but it doesn’t hurt you to begin to think about it now as to not waste time later. See Below for the money advice:
The 20’s:
The Article Advises / My Input:
-Pay off Student Loans / Pay off all debts or avoid all Debt is best solution
-Sign up for 401K retirement plans / Take advantage early and contribute 20% (You won’t miss it if done from the beginning)
-Fund a Roth IRA / Establish a Surplus -place 50% in Roth ETF’s / 50% in Stocks
The 30’s / 40’s:
-Buy a home / Only if you have 20%+ down payment $$, and expenses are less than 30% total income
-Sign a Will / Do this only when you have kids, and finally have reached 100K in assets
-Purchase 20 years Term Life Insurance / Purchase only 10X your income, instead get 30 year term level
The 50’s:
-Plan Ahead, Find something you can transition too that’s less busy / Agree
-Review asset allocation, do not fall victim to generic advice / Reduce risk but still stay in the game as funds are needed well into the 90’s
-Form a Charitable Foundation / If house is in order, begin steps to give back
The 60’s:
-Update the Estate plan, with careful attention to taxes / Agree
-Play with Social Security, if you are still working consider a file and suspend ploy it will pay off later with bigger SS checks / If Non-SS income is consistent I agree
-Sign the Bill Gates giving pledge to give away more than 50% of wealth to charity / After family is taken care off, I agree
As you can see I only added on the money advice the article mentioned. There’s a ton of money advice for every age range that can be given in multiple posts so be on the look out for the second part of this series coming soon. I hope you can get some value out of the advice given above, have a good money day and life.
Comment if you agree with these steps and if you have any other useful money advice for every age range?
Rich Uncle EL
photo credit: Cayusa via photopin cc
A couple of other items for the list….
Get some education about financial planning. Take a course. Read some (many) books. Find a financial mentor you can trust. Arming yourself with some knowledge will help to ensure that you do not buy into some crazy scheme suggested by a financial planner who earns their income from you buying their product. Smokey the bear says "Only you can prevent forest fires". I say "Only you are truely looking out for your best financial interests"
I agree with your comment about Charitable Foundations. You first need to ensure your house is in order, then your family (children) and maybe then your extended family. I think only people with multiple millions of dollars need to be concerned with Charitable Foundations. I'm more concerned with "changing my family tree" as Dave Ramsey says.
more to come….
Minimizing estate taxes is a good point but again I think you need to be careful. You don't want to spend $1000 today to eliminate $1000 taxes in the future. I think the financial industry has made a lot of money convincing people that it is really bad to pay any tax to the government. Don't get me wrong, last year my wife and I paid $130,000 in income tax (ouch) and I sure didn't like doing it. You just need to understand the tradeoff in terms of costs, risks, etc. Again Dave Ramsey makes the point about mortgage interest and taxes deductions. Dave says (paraphrasing) "Does it really make sense to send a check to the bank for $1000 in interest to avoid sending a check to the government for $300 in taxes"
Anyway a good article. Wish me well and happy birthday as on 5 days I leave the worries of those 40 year olds behind and start on those 50 year old suggestions
Hey Doug,
Thanks for the great advice. yeah I don't get why people will rather pay mortgage interest instead of paying a cheaper amount in taxes. I have read Dave Ramsey's books and I get that debt is never good. Happy 50th bud. Talk to you soon.
I agree with your points. Of course not everyone is going to be able to do all of that though.
I agree but the advice has to be general for all individuals , some might be able to give to charity and others might not. Thanks for the comment talk to you soon.
Cheaper and better rates and deals come onto the market all the time – if you don’t review your savings and investments regularly you stand to lose money. In fact, many banks, building societies and product providers rely on you doing nothing! A regular review will also help you save tax, check that you’re on track to meet your goals and even reach your goals sooner.