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By Jay Gershman, Retirement Visions LLC, West Hartford
All summer long we’ve been highlighting different decades of life to give readers a glimpse into what their financial focuses should be based on their age. In this week’s column, we’re talking life and money for readers in their 40s, a transitional decade and one of the most crucial. To help me, I’d like to introduce Retirement Visions Financial Advisor and our resident 40-something, Dave Sutkaitis. Here is Dave:
First things first, don’t put off going to the eye doctor because it’s nice to read a book or see your phone without having to squint. Seriously though, as we get into our 40s, our bodies start to change and not for the better! It’s important to keep ahead of the aging game with a good fitness plan and diet. Physical activity has so many benefits and also contributes to our mental health. The food we put into our bodies is also crucial. What you got away with in your younger years, will start to catch up with you now.
Next, let’s talk retirement. This is the time when you should start getting very active with your retirement planning and savings. You still have another 20 to 25 years to get it right, but the longer you wait, the harder it will get. Rome wasn’t built in a day and your nest egg won’t be either. According to the 2019 Retirement Preparedness Study, only 35 percent of Gen X’ers felt like they might be able to live comfortably during retirement. Don’t be a statistic. Start by contributing 15 percent of your pay into the retirement fund of your choice. If you earn $100,000 annually and work until age 67, you may be able to accumulate $1 million based on historical market returns. The key is to get started and be proactive.
As important as it is to have a nest egg for retirement, your number one goal should be to live debt free after your working years are over. You can only save more if you’re not paying more, right? You want to be in a position to have your money working for you and not credit card or mortgage companies. Think about your household budget. Do you have a clear idea of what you are spending month-to-month? If you don’t, now is the time to find out. The babies you once had now need braces, sneakers, spending money, and food, and those expenses will only increase until they are out of the house. Make sure that you have a plan to meet your rising needs.
Speaking of kids, I would be amiss to not mention college and the financial expectations that come with it. Researching financial aid availability will be vital, as well as grant and scholarship opportunities. Help your child get into advanced placement classes while in high school to lessen the credits they’ll need in college. Find them places to explore job shadowing and career placement opportunities. Hire a tutor or have your student find help to prepare for the SATs. Staying on top of what’s out there and doing your homework can make a big difference in your child’s future.
Your insurance needs may change drastically soon if they haven’t already. You might have a new driver in the family and it’s important to understand how that will affect your premiums and your liability. Now is also the time to work with your property and casualty agent to make sure you have the best coverage to protect your family and your assets. If you don’t have an umbrella policy, now would be the time to consider it. Also, check on your life insurance. If you bought term insurance years ago, it is a good time to dust those policies off and review your coverage. Finally, make sure that you have disability coverage in place. Your earnings have increased since you began your career and now that you have a home, family, and maybe a business, you want to make sure you have income to support it all if you’re not able to work.
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Do-it-yourself investing may have been easy years ago but now there is a lot more to consider and not enough hours in the day to do it all. Making the wrong choices or acting on emotion can derail your portfolio for years to come. Don’t let the news headlines and political rhetoric get to you. A good advisor will work alongside you, allowing you to enjoy today knowing that you are making the right moves to get you the retirement lifestyle you desire.
Be intentional about how you live each day and ensure that you are taking time for family despite your work schedule. Have a date night with each child and give them opportunities to talk to you. Remember most teens do not want to be told that their concerns are irrelevant, they want to be heard and helped along the way. Also, remember to enjoy special time with your spouse. As our children age, we can easily be consumed by their schedules and neglect our relationships. Remember the one who said “I do”? You don’t want to find yourself living with a stranger when the kids are out of the house.
Jay Gershman is the Owner and Founder of Retirement Visions LLC, a West Hartford-based financial planning firm that focuses on comprehensive life planning and financial management. Dave Sutkaitis is a financial advisor who works to help clients achieve their financial dreams by creating a plan of accountability and working together to make what seems impossible a reality. For more information, visitwww.allset2retire.com. Information and advice are for guidance only and opinions expressed belong solely to the author. Securities offered through Securities Service Network, LLC. Member FINRA/SIPC. Fee-based services are offered through SSN Advisory, Inc., a registered investment advisor.
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