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Financial Objectives
During Your 20's
· Develop habits of savings and investing.
· Prepare annual budgets with a savings component of 5 to 10 percent of gross income.
· Accumulate a down payment for a home and an emergency fund of approximately six-months' expenses.
· Develop a favorable credit rating.
· Begin an investment program with long-term growth potential.
· Establish a retirement savings vehicle.
· Determine insurance needs and obtain adequate coverage for: · disability
· major medical
· property
· liability
· life insurance. · Have a will prepared and sign it. It should include a guardianship provision if you have children.
During Your 30's
· Budget and control discretionary expenses.
· Continue an investment program and consider both growth and tax savings.
· Coordinate overall tax planning.
· Contribute to tax-deferred retirement plans.
· Plan education funding for children. Consider: · savings
· trusts
· gifts
· custodial accounts
· tax-deferred investments. · Reconsider insurance needs, especially disability and, if needed, life insurance.
· Update wills for changing family situations.
During Your 40's
· Provide education funding for children and funding for other monetary support to provide for family members. Consider: · gifts
· trusts
· home equity loans
· unsecured lines of credit
· and so forth. · Increase savings as family expenses decline.
· Seek investments that will maximize long-term asset accumulation. Consider the tax advantages and growth potential of investments.
· Reevaluate insurance needs as children become independent.
· Develop an estate plan, including gifts and trusts.
During Your 50's
· Increase annual savings to 10 to 15 percent of gross income.
· Plan retirement activities, location, expenses, etc. Adjust retirement savings as necessary to accumulate sufficient retirement funds.
· Develop an estate plan, including gifts and trusts.
· Monitor current estate plan, modify it as necessary.
· Develop a more conservative investment program, still focusing on growth of capital, hedges against inflation and tax savings or deferral.
During Your 60's
· As a hedge against inflation, hold some investments that will provide growth.
· Evaluate investments, including tax considerations.
· Reconsider insurance needs, possibly decreasing life and disability insurance. Maintain adequate Medicare supplementary insurance.
· Update estate plan: consider a gifting program. Also update your will.
· Update retirement plan including activities, location, expenses, etc.
· Restructure investments to provide retirement income.
· Pay off mortgage, if indicated by tax and financial considerations.
· Reduce other debts to an amount that can be carried after retirement.
· Decrease discretionary expenses, if necessary.
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