Financial Planning According To The Age

No matter how older you get, planning your finances always create little pains. These are certain pointers which can act as a helping hand and which everyone can follow to plan finances according to their age. Of course one can accomplish any of these goals sooner.

At the age of 25

Save money every month

In order to meet up with unexpected expenses you should start saving at least 10% of your earnings and build up your emergency fund and build up a large corpus

 

Become financially independent

Start working towards complete financial independence which would give you a sense of pride in how you live your life and also free up your parents money for other things which they need or want

 

Start repaying your student loan

Once you are done with your studies and have a steady income, your first priority should be to get your students loan under control

 

Allocate income for your marriage

Generally people at this age plan to get married, so start saving for your dream wedding and you should have enough funds to match up with the needs of your family.

 

At the age of 30

Save 6 months worth of income

You should have funds equal to /matching to the 6 month of your income, so that if you or your spouse loses job or has any serious health issue, still you would be able to meet with your expenses/pay your bills

 

Allocate income for your child’s future

You should have enough funds and a steady source of income to meet up with needs of your children and their education.

 

Save for your retirement

Now it is time to start building up for your retirement, so that you would have enough money at the time of your retirement, because the longer you wait, longer it will take.

 

Pay off all your non mortgage debt

As you reach towards your 40’s you should get yourself rid of all non mortgage loans like education loan, credit card debts, personal loans etc so that you can use your income more effectively.

 

At the age of 40 and 50

Optimize your taxes

At this point of time, you are likely to be earning more which may put you in higher tax bracket, start investing in a manner which helps in reducing your tax liability

 

Invest with an eye towards your future

Your investment portfolio should include investments are going to last longer and would help you lead a comfortable life during your retirement.

 

Safeguarding the future of family

As you enter your 40’s you start thinking about how would you safeguard the future of your family if something unexpected happens with you. Your life insurance plan and other investments will help your family to pay for their expenses.

 

Maximize your retirement contribution

Your main goal at this phase of life should be to maximize your contribution towards your retirement funds, so you can live life comfortably in your golden years.

 

Pay off your mortgage

If you still owe any money on your house, now it is the time to pay it off, so you can enjoy your home during retirement.

 

Rebalance your retirement portfolio

Look into your retirement portfolio with your financial planner and make sure that investments carry minimum risk as you reach closer to retirement.

 

Converting your investments

Start converting little of your long term investments to short term safer funds to meet up with the needs of your child’s education or child’s marriage etc

 

At the age of 60

Reach your retirement goals

Before you can retire make sure you have enough balance in your retirement funds to support you and your family.

 

Sell un-needed assets

Sell up all your unneeded assets so that you can reach your retirement saving goal sooner

 

Plan your investments

You would already have a will and you want your investments to be planned in such a manner that your hirer gets the benefits of the same in timely manner.

 

Start consolidating your investments

As you grow old start consolidating and documenting your investments, even if any unforeseen event happens at least your family members would have an idea about where your investments are.