Financial milestones are goals we aim to achieve. Some should be stressed at certain milestones in our own life. In this vein, we picked five financial goals you may have depending on your current age.
Are you just entering workforce?
Start saving for retirement –
If you can stand to, save 10% of your salary. The earlier you start doing this, the more you can take advantage of compound interest. If you’re a woman, chances are you will live longer (sorry boys), so try and factor that into your retirement savings. Although you may be receiving a pension if you joined the force, it might not be enough for you to live on entirely.
You’re in Your Mid-Twenties
Set up an emergency fund –
Save to be able to cover all your expenses for 6 months if you’re single, three months if you’re married. Start by adding $100 a month to a separate account. You can set up an automatic withdrawal from your checking account to help build your emergency fund.
You are shy of or just on the other side of 30
Pay off your credit card debt –
Eliminate the higher interest rate debt first. This could be credit cards or student loans. If your rates are near double digits, look into consolidating your loans for a lower rate or taking advantage of a free credit card balance transfer to a RMLEFCU Visa.
The big 4-0 has happened
Max out your retirement contributions!
One way to do this is to meet your employer’s match.
There are two ways to look at this:
- Free money that you can’t claim unless you opt-in.
- A 3-6% bump in your salary that you didn’t have to work for or negotiate.
Another way is to add to your retirement portfolio with an IRA account. Look at whether a Roth or Traditional plan is best for your situation. Consider whether you want to pay taxes up front or when you take the money out after retirement. It’s difficult to imagine, but try to figure out whether you will remain in a similar tax bracket upon retirement. Some people want to spend more in retirement and travel while others expect to spend less.
You are 50 or older
Prepare to downsize
- Are you storing your children’s belongings? If it isn’t important enough to be in their apartment or with them at college – it shouldn’t be taking up precious space in your home?
- Can you get by on one car?
- Could you do without extra bedrooms and unused space?
- Will you need a one level home in the future? Less of a yard?
If you’ve answered yes to any of the above, then you are a great candidate to downsize your home and your stress.
Best of luck to all of our members who are at different stages in their lives. If you would like to talk to someone about other personal financial milestones, please reach out to Debby, RMLEFCU’s in house financial planner. Learn more at https://www.rmlefcu.org/resources/financial-planning.html
You can achieve your financial goals in 2017!