Your hectic personal finances start at your 40s. If you are at 40s today, you’re most probably already married and have children. So, today we’ll be going to talk about the Top Financial Planning Tips – for 40’s.
Your kids might be old enough to drive themselves or if you’re a late bloomer, your kids are probably below 10 years old by now. Either way, you’re at a time in your life when you’re putting your youth aside. And your focus is more on doing some more financial planning for your future and your family’s future.
A typical dilemma faced by people in their 40s is the need of saving for college tuition for their kids and putting money into a retirement account while saving money for the down payment of your dream house if you haven’t bought it yet by now.
Although some countries, like Denmark, have a free education and monthly allowances from the government (paid through taxes), we still save money for the kids to ensure that they will not need to borrow money as when they go to college/university. On the other hand, 15-20 years from now, the education system could be totally different from today.
The following Top Financial Planning Tips – for 40’s will help you to ensure more stable personal finances for the rest of your life.
Top Financial Planning Tips – for 40’s.
Saving For Retirement As The Priority.
If you haven’t done automatic savings for your retirement during your 20s or 30s, then you need to do it now – you don’t have room for delays. At your 40s, you still have around 25-30years before your retirement age. 25-30years of savings for retirement will give you enough time to accumulate money and have a better financial situation when you retire.
Remember that you can invest more money in your retirement aside from your 401K and IRA. Your bank advisor can help you to decide which plans are best for your current finances.
Juggling Savings For College And Retirement.
It’s tempting to put retirement savings on hold in order to send your children to the best college education. But experts believe that this is a bad idea.
Here are the reasons why:
- You/your children can avail a very affordable loan for college, but you can’t loan any money for retirement, and it’s difficult to make up for the lost time.
- Working longer isn’t always an option – many people are forced to retire earlier than they planned due to health problems or company downsizing.
- You can help your children to pay their student loans when you saved enough money when you retire.
- You can refinance to a 15-year mortgage – Refinancing to a 15-year mortgage will give lower fixed interest rates but It will bind your fixed mortgage payments.
- Simply make extra payments on your current mortgage. Paying extra to your current mortgage with an additional 1-month contribution, i.e. 13 months payments divided by 12 months will accelerate your payments, and you’re still free to adjust your contribution if your budget becomes a little bit tighter.