Financial planning is an integral part of life for adults of all ages, but each age group has different needs and focuses. If you are in your 40s, you might wonder what you should focus on with your financial planning tasks. You can meet with a financial planner to learn more about this, but here are several tips you can keep in mind during this decade of your life.
Have a Large Enough Emergency Fund
Having an emergency fund is important for all age groups, but people in their 40s tend to have an easier time building a sufficient one. A sufficient amount to have in your emergency fund might be equal to approximately six months of your expenses. For example, if you spend $4,000 on your monthly expenses, you might want to work on getting $24,000 in your emergency fund. By having this much in there, you can feel safer if something goes wrong in your life. If you lose your job or cannot work for a few months, you can fall back on this money. You can also use it to pay for unexpected repairs with your home or car if necessary.
Work on Paying Off All Your Debt
The second focus you should have in your 40s is paying off your debt. While you might not be able to pay off every debt you owe, you should aim to pay off most of your debts. The main focus is to pay off credit card bills, medical bills, and student loans. You do not have to worry about paying off your mortgage yet, but you should focus on doing that in your 50s.
Focus on Building Your Retirement Funds
The other focus to have in your 40s is building your retirement funds. While you may still have 20 or 30 years left to work, now is the time to really start stashing your money away in retirement funds. Your financial planner can help you select the right types of retirement funds to help you save more money and avoid paying taxes on the money that you save for your retirement.
These are three areas you can focus on while you are in your 40s. If you work hard during this decade, you can likely pay off most of your debt and start building your retirement accounts. If you need help with financial planning, contact a financial planner today.Share