With two decades of adulthood behind you, the 40s should be a time when your financial plans are in full swing. But that is not always the case. Either way, it is not uncommon to be fearful of your financial future even at this point. But there is sound advice for this season of life.
The number one area most financial advisers would tell someone in this age group to focus on is retirement. These are prime earning years, so make the most of it and sock away as much as possible.
The best way to do this is by maximizing your company’s retirement plan, especially if you get a company match. It is essentially free money and not taking advantage if this would literally be leaving money on the table. Once you have maximized your workplace 401k, look to outside investments like IRAs and contribute as much as possible.
Don’t be afraid to invest aggressively at this point. There are still over two decades left for the average worker to save, so investing in stocks is more than allowable; in fact, it’s recommended. Twenty years is plenty of time to absorb and recover from any losses associated with more aggressive investing strategies.
Another issue to be addressed is what to prioritize: retirement or college savings? While both are important, if you have to put one goal above the other most recommend focusing on retirement. Higher education can be flexible and you can take out a loan. You can’t finance your retirement.
Finally, the last piece of advice is to simply get going. You aren’t getting any younger, and whether or not you have done it right up until now, today is a new day, and tomorrow is coming fast. Find a plan, stay the course, and see the results!