Financial Advice I Wish I Would Have Had When I Was in my 20s, 30s, 40s, 50s and 60s.

Birchwood Financial Partners
Sep 4, 2019 12:52:06 PM

Financial Advice I Wish I Would Have HadWhether you’re just entering your 20s and starting your career, or you’re in your 60s and thinking about retirement, you most likely have questions related to your finances. We asked our team of advisors and our investment manager for the best financial advice they wish they would have received at different times in their lives.

Financial Advice for Your 20s

Earning power is likely your biggest asset. 

Consider continuing with education and get your job experience to make you more valuable to your next employer. It is a lot easier to go to school when you don't have a lot of competition for your time like a demanding job or kids. 

Authored by Dana Brewer, CFP®

Prioritize your goals and spread them out.

These were expensive years for me. A cross-country move, college graduation and student loan payments, got married, bought a car, bought a house and started my first real job. Looking back the rubber band was stretched very thin. I wish I would’ve saved and spread the expenses out more so it didn’t feel so tight.

Rent vs. buy.

I was determined to buy a house because I was tired of apartment life. What I didn’t realize is that even a small starter home comes with expenses you don’t see when you’re renting (for example the appliances when they break). Renting for some amount of time until I had more of a cushion to pay for the unexpected things would’ve been ideal.

Save—even if it’s a small amount.

Though the rubberband was stretched thin, it’s amazing how even saving a few extra bucks a month can really help when unexpected things arise. I always felt as though little amounts weren’t enough, but in reality they can take you a long way. Luckily I was working toward becoming a financial advisor and knew at the very least to start saving in my 401(k) right away, at least enough to take advantage of an employer match.

Have someone review your employer benefits.

Your first real job after college not only brings a new responsibility, but also a bucket of benefits that even I didn’t fully understand at the time. Having access to a financial advisor who knew the ins and outs of all different types of insurance, investment selections for the 401(k) and other extra benefits that you may or may not even need yet, was so incredibly helpful.

Don’t get caught up in credit card craziness.

I felt like I needed a credit card or two to start building my credit so at some point I’d qualify for a mortgage loan. So many friends around me were doing the same and were racking up thousands of dollars in credit card debt they couldn’t pay off. I’ve learned there are other ways in which you can start building credit. For example, have a co-signer on a loan or use a starter credit card that has a lower credit limit.

Travel. Travel. Travel.

There’s a freedom you have in your 20s that will change as you start building a family. If travel is important to you, make it a financial goal to make it happen. Travel doesn’t have to be expensive. Take road trips, camp at National Parks, scope out flight deals and stay in inexpensive hotels.

Authored by Rachel Infante, CFP®

Financial Advice for Your 30s

Is it time to invest in your forever home?

This is a common time that people start to realize that they are outgrowing their first home or are tired of renting. Maybe you’re ready or have already started a family or you’ve found the perfect neighborhood that fits your lifestyle. You may start thinking about finding and funding your “forever home.”

Other important considerations for this time:

  • Prioritizing paying off debt by deciding what to pay off first.  How much debt is reasonable and what are the trade-offs between having some debt and being able to start investing for the future?   
  • Increase your savings towards retirement. Consider a non-qualified account in addition to workplace retirement plans. Non-qualified accounts are those that are not eligible for tax-deferral benefits, but because of this you can invest as much or as little as you want in any given year, and you can withdraw at any time.
  • If you have children, do you plan on helping fund their college? Now is the time to consider how much you plan to fund and if you want to start a 529 college savings plan.

 - Authored by Damian Winther, CFP®

Consider how having children will impact your career.

If you have children, think through the decision for one of the parents to take time off from work to raise kids. What are the pros and cons now verses the pros and cons in the future. If you are the stay-at-home partner and plan to go back to work in a meaningful way in the future—what can you do now to remain engaged and relevant to your profession while on break? 

Or is it a time to find a new profession? I decided to pursue a degree in finance so that I could manage my family’s finances when my own search for a financial planner proved unsuccessful.

Authored by Dana Brewer, CFP®

Financial Advice for Your 40s

Spend the time to get your financial house in order. 

Are you well insured to protect your family? Do you have a plan to help finance your children's education? Are you getting tax advice or just someone to complete your tax return? Don't have any clue what you spend each month, figure it out. Haven't completed that will or estate plan yet, now's the time.

Put a reminder on your phone to check your retirement plan at least once a year. 

Can you bump up your contribution amount? You want to enjoy life right now and invest in those experiences and memories with your family, so be careful not to be overly austere. Check your allocation and make sure you're still invested for long-term growth. Be a shrewd investor if the stock market goes down and increase your contribution to stock funds while others are selling. You have a long investment time horizon in your retirement account.

You are in or are approaching your peak earning years, so be sure to save in and outside of your retirement account.

Contribute to a Roth IRA if you qualify. Set up monthly contributions to a taxable account that gets invested automatically according to your tolerance for risk and potential liquidity needs.

Don't be too quick to pay down that mortgage early. 

If you were lucky enough to finance your home with an interest rate at or below 4 percent, that's some of the least expensive financing you can get aside from a new car. While that new car likely began depreciating the moment you signed on the dotted line, your home likely has and will continue to appreciate over time. Be a smart money allocator and pay down your other debts before your mortgage. Even then, investing in the stock market has generated an average return of 11 percent per year on average from 1950-2018, so investing those extra dollars may have a better result over time than using it to pay down your mortgage at a 4 percent interest rate.

Continue to invest in yourself and take steps to protect your earning ability. 

Network with peers and continue to educate yourself to make yourself better at your job and more valuable to your or other employers.

Take the time to enjoy your life. 

Whether it's a 3-day weekend getaway unplugged from social media and email or a 3-month sabbatical traveling, you now appreciate how quickly time moves and will therefore take greater satisfaction in these separations from everyday life.

If you're fortunate to have living parents, spend time with them and remain close. 

Be there for them as they age and take steps to keep them safe. Approximately 34.2 million Americans have provided unpaid care to an adult age 50 or older in the prior 12 months1. Do you have a plan for your parent’s ongoing care when the situation arises and that meets financial abilities and time commitments?

Authored by Steve Dixon, CFP®

Financial Advice for Your 50s

This is a great time to look at your financial plan and see if your retirement goals are realistic.  

Can you retire when you want with the lifestyle you want, or do you need to make adjustments? Maybe you would like a second act and switch your career from the corporate world to non-profit. Review your plan to see how you can make this adjustment.

You may be sending kids to college soon.  

Evaluate if college testing prep or college connecting services are right for your family.  Increasing student scores on college placement exams can save money with increased scholarships. College connecting services may also save money by directing you to colleges that have merit based scholarships.

You might be caring for kids and parents at the same time now and getting stretched thin.   

Seek resources to help you manage your parent’s health and needs. Decide how much you are going to help your adult children land on their feet after graduation. Discuss with them what you expect in terms of their taking over their own expenses. Help them learn budgeting and introduce them to your financial advisor so they can start out making good financial decisions from the start. Having fully launched children enhances your own retirement objectives.

Reevaluate your insurance needs.  

The large life insurance policy you needed when the children were small might not be right for your current situation. Evaluate if long-term care insurance is right for you or if you can self-insure if you had a long term care event.  

Prepare a Read Me First file.  

If something were to happen to you, will your spouse or heirs know where to find your financial documents? Create a list of people to contact, list and location of your assets and liabilities, tax returns, and estate documents. Consider simplifying your financial life to make it easier on yourself and anyone who takes over for you, like consolidating employer retirement accounts into one Individual Retirement Account. If you have various stock and mutual funds at different brokerages, consider consolidating to one brokerage. 

Update your estate plan.  

You may have an old will you created when your children were small where you named a guardian and trustee who distributed the funds when they turned 21. Now that your children are approaching the age where they could inherit a substantial sum outright if you died suddenly, reconsider your trust disbursement direction in light of who your children are. Update with a codicil or trust amendment if necessary. Update your Personal Representatives and Health Care Agent.

Authored by Bridget Handke, CFP® CAP®

Financial Advice for Your 60s

Get professional assistance.

As a financial planner, you’d think that there wouldn’t be any financial advice that I wouldn’t know as I entered my 60s, and that would be mostly true. I now know from experience that all of the financial decisions that one makes in their 60s take considerably more time than anticipated. They can be some of the biggest financial decisions one makes in their entire lives. 

  • Health insurance If you retire after age 65, will you start Medicare or postpone it if you’re still on a group plan and working? If you do start Medicare, what supplement plan do you choose? 
  • Social Security When should you start Social Security? Would a spousal strategy work for you? Tax strategy remains an important part of planning, in terms of whether to start withdrawing funds from retirement plans prior to the mandated required minimum distributions at 70 and a half. 

The best advice I can give anyone as they move into their 60s is to get professional assistance! Of course I’m biased and think professional advice is important at any age, but there can be a fair amount of complexity in the 60s.

Authored by Kay Kramer, CFP® 


1 National Alliance for Caregiving, Caregiving in America, 2015New call-to-action

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