When we think of financial milestones, we sometimes imagine them as black-and-white. But as we move through life, we all encounter new goals and ambitions that we strive to achieve – and our financial goals should be no different.

Achieving financial independence is easier said than done. It requires hard work, dedication, and thoughtful planning. But with the right mindset and a little bit of discipline, anyone can achieve their financial goals.

Financial Milestones for Your 20s

This generation of young adults has an uphill battle. They’re starting their working lives with massive amounts of student loan debt, skyrocketing housing costs, and a highly competitive job market. Even with these challenges, there are still financial goals that can be achieved in your 20s.

1. Start an Emergency Fund

One of the most important milestones to hit in your 20s is to establish an emergency fund. This should be enough to cover at least six months of living expenses in case of unexpected job loss or financial hardship.

2. Open a Retirement Account

Another key milestone to reach in your 20s is to start contributing to a retirement account. It may seem far off, but the earlier you start saving for retirement, the more time your money has to grow. Even if you can only afford to contribute a small amount each month, it’s important to start building that nest egg.

3. Start Building Good Credit

You’ll thank yourself later if you work on your credit score. Earning a good credit score can mean the difference between sky-high insurance payments and much lower rates, putting that dream apartment within reach, or helping you realize your goal of owning a home. 

Financial Milestones for Your 30s & 40s

As we age, our financial goals and priorities will shift, and we need to be able to adapt to these changes. There’s no “right age” to buy a house or start a family or jump into your career. 

In this era of your life, it’s important to sit down and decide what kind of life you want for yourself in your working age and retirement age.    

1. Have “The Talk” About Money

Include your partner if you have a significant other, but this is also a conversation you need to have with yourself. Take a hard look at your spending habits, your income, and your goals. Decide what kind of lifestyle you want to live and what sacrifices you’re willing to make now to make it happen.

2. Don’t Fall Into a “Lifestyle Creep”

As you start to earn disposable income and gain a little more financial stability, it can be easy for your lifestyle to slowly eat away at your money. This is called a “lifestyle creep.” When you total up all of those small purchases, you might have an unpleasant surprise when you realize how much they cost. 

Your 30s & 40s are a crucial time for wealth planning. Make sure to live within your means and prioritize saving for important milestones, like a down payment on a house or starting a family.

3. Diversify Your Investment Accounts

A good rule of thumb is to increase your retirement savings to at least 10-15% of your income. You might also want to start investing in other accounts. It’s important to understand the differences between different retirement accounts (401k, Roth IRA, Traditional IRA, etc) and have a strategic plan. 

Financial Milestones for Your 50s

As you enter your 50s, you may begin to feel the pressure of time ticking away. Retirement is no longer a far-off concept, it’s something you’ll need to start seriously planning for. These financial milestones will help you stay on track:

1. Personal Finance Planning

As you get closer to retirement age, it’s important to make sure that your investment portfolio is balanced appropriately. You may want to start shifting some of your investments from stocks into more conservative options such as bonds, annuities or money market accounts as retirement draws closer. As well as shifting your mindset from a growth phase to a conservative income phase. 

2. Update Your Estate Documents

As your children and your family grow, it’s important to update your estate plan. Make sure to keep your will, living trust, and power of attorney documents up to date. If you don’t have them yet, now is the time to get them in order.

3. Strategize Your Investment Accounts

In your 50s, you may find that you have multiple accounts scattered around from a number of jobs. To better manage these investments, it may be a good time to bring them together and merge the accounts under one umbrella. This could mean rolling over old 401(k)s into a single IRA or your current workplace plan if allowed. 

4. Tax Efficiency

In your 50’s you may find yourself in your highest earning years. Working with a qualified tax consultant could help you minimize your tax exposure. In these years it may be wise to look at tax-deferred accounts for your non-qualified monies that would move the tax payments into your retirement years when your earned income is lower. 

There’s no “one size fits all” solution, so it’s best to plan a strategy that works best for you and your goals. 

Planning Retirement and Beyond

Lastly, it’s important to ensure that you have reliable sources of income in retirement so that you can continue to enjoy the life you worked hard for. There are many tools available to help find the best time to start drawing your social security depending on your situation. For example, you may consider starting your Social Security earlier for the income, or draw it later to capitalize on the payment increase. 

As you near your retirement, we encourage everyone to work with a financial advisor. At The Resource Center, our mission is to help you experience the retirement of your dreams without the worry of overspending or running out of money. This is a major milestone in your life, and we want to help you make the most of it!

We’re here to help you every step of the way:

• Personalized investment strategies
• Retirement planning
• Wealth planning
• Tax-efficient strategies
• Monthly income streams
• Evolving goals and milestones

As your life changes, so should your financial plan. We tailor our strategies to align with your current situation and objectives, allowing for flexibility in the face of change.

Work with a Financial Advisor | The Resource Center

Financial advice isn’t just for the wealthy few. At The Resource Center, we’re here to help you on your financial journey. We create personalized financial plans with strategies to help optimize your assets and reduce risk–all while keeping your lifestyle intact.

One of our biggest priorities is helping you feel confident and knowledgeable. With our financial planning services, The Resource Center will help develop a plan that diversifies your assets, stays consistent with your level of risk tolerance, and provides a stress-free environment to turn to when you need help.

Catch Bruce Porter’s show Dollars & $ense Tuesdays at 3 pm on KOLR’s Ozarks Live. This radio show is a paid placement.

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Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. This blog is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. Our Firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. 2063328 – 10/23