What’s Your Age?

Age based financial wisdom

Select your age to see what you should be considering.

Congratulations, you are deemed an adult and have a big world staring you in the face, now what?

  1. College GraduateIf you went directly into the job market, meet with a financial professional to see if it makes sense to start making a small monthly contribution into an IRA. (i.e. $50/mo)
  2. If your employer has a retirement plan that they are providing a matching contribution, it is generally recommended that you personally contribute enough to receive the entire matching amount.
  3. Your “Rainy Day” fund should have 1-2 months living expenses.
  4. Start saving for a car down payment?
  5. Be careful not to fall into the credit card trap. Live within your means.

A few years in the real world now and you are starting to realize that you really didn’t know everything @ 18 like you thought you did. Maybe your parents did know a thing or two. (lol)

  1. 24 years old hardIf just coming out of college, revert to guidelines for age 18.
  2. If you started working @ 18, then consider increasing your monthly contributions into your retirement. (Actually your financial professional may have recommended this each year thus far. A consideration might be a portion of any potential annual raise that you receive.(i.e. if raise is 3% consider allocating an additional 1% of your annual income into a retirement account whether it be your employer provided retirement plan or your own IRA.))
  3. Your “Rainy Day” fund should have 2-3 months living expenses.
  4. Now that you have a car, consider saving for a house down payment?
  5. Be careful not to fall into the credit card trap. Live within your means.

At this point you may find yourself with a family. If you have not met with a financial professional, now would be a great time. You may wish to “interview” a few to make sure you find one that you’re comfortable with.

  1. 30 familyReview current investment allocations.
  2. Have you been increasing your retirement contributions?
  3. Do you have Life Insurance to protect your family in case something happens to you?
  4. By now disability insurance should have been considered whether it be employer provided or individually purchased (to protect your earnings).
  5. If you have children, have you reviewed the possible need for educational savings?
    Establish a retirement goal and ensure you are on track. By now you are old enough to realize that goals must be realistic, but never lose sight of your dream. A “dream” is what you wish for. “Goals” are what you set and achieve to get there. I never met a baby that stood up and starting running before they learned to walk.
  6. Your “Rainy Day” fund should have 3-6 months living expenses.
  7. Be careful not to fall into the credit card trap. Live within your means.

By now you are probably amazed at how little you knew at 18, 24 & 30(lol), and you are realizing how much more you could learn in life. I believe a person can always learn more. When you think you know everything it is because you don’t know what you don’t know.

  1. 40Review current investment allocations.
  2. Have you been increasing your retirement contributions?
  3. Do you have Life Insurance to protect your family in case something happens to you?
  4. By now disability insurance should have been considered whether it be employer provided or individually purchased (to protect your earnings).
  5. If you have children, have you reviewed the possible need for educational savings?
  6. Your retirement goal. You may have had a couple of set-backs at this point and need to revise your goal. I think a retirement plan is like a business plan and should be reviewed on a regular base and possibly adjusted from time to time. Never lose sight of your dream and keep setting those mini-goals to get there.
  7. Your “Rainy Day” fund should have 3-6 months living expenses.
  8. Have you looked at your current mortgage rate? Does it make sense to refinance?
  9. Depending on your income level and your investment portfolio, you may need to consider some more tax-efficient ways of investing. Ask your financial professional or tax preparer.
  10. Be careful not to fall into the credit card trap. Live within your means.

Over the hill? I think not! This is where the fun begins. Btw, how are the grandkids? At this point the average investor has three different investment firms they work with. I would encourage you to have one financial professional that you use as a point-guard that knows what you have and where.

  1. 5050 is a magic age with the government as they allow you to contribute additional dollars into many retirement accounts commonly referred to as “catch-up contributions”. A chance to off-set some of life’s set-backs.
  2. By now your “point-guard” should have been ensuring that your accounts are properly allocated based on your suitability and retirement planning needs on an annual basis.
  3. Consider life insurance as a possible tool for a tax free source of retirement income.
  4. Make sure you take time to review all of your accounts beneficiary designation. This includes life insurance policies, annuities and employer sponsored retirement plans as well as any account that you have with any brokerage firms. I have heard too many horror stories.
  5. Review health care and long term care options/needs/costs.
  6. Your “Rainy Day” fund should have 3-6 months living expenses.
  7. Considering a cottage at the lake, or a winter home in a warmer climate? What is the most tax efficient method of funding this purchase?
  8. How about estate planning? Do you have a Will or Trust? Which one is right for you? Seek out an estate attorney to give you a bit of guidance here. Your financial professional might have a couple of contacts for you.
  9. Depending on your income level and your investment portfolio, you may need to consider some more tax-efficient ways of investing. Ask your financial professional or tax preparer.
  10. Have you looked at your current mortgage rate? Does it make sense to refinance?
  11. Be careful not to fall into the credit card trap. Live within your means.

Early retirement?

  1. 55Most retirement plans have tax consequences for early distributions. Also, early retirement could affect your Social Security benefits.
  2. Some retirement plans are accessible without penalty, you’ll need to review these options with your financial professional for more clarity.
  3. Although pensions are much less common, they are still out there and in many cases auto-adjust down once Social Security goes into effect.
  4. Consider life insurance as a possible tool for a tax free source of retirement income.
  5. By now your “point-guard” should have been ensuring that your accounts are properly allocated based on your suitability and retirement planning needs on an annual basis.
  6. Consider life insurance as a possible tool for a tax free source of retirement income.
  7. Make sure you take time to review all of your accounts beneficiary designation. This includes life insurance policies, annuities and employer sponsored retirement plans as well as any account that you have with any brokerage firms. I have heard too many horror stories.
  8. Review health care and long term care options/needs/costs.
  9. Your “Rainy Day” fund should have 3-6 months living expenses.
  10. Considering a cottage at the lake, or a winter home in a warmer climate? What is the most tax efficient method of funding this purchase?
  11. How about estate planning? Do you have a Will or Trust? Which one is right for you? Seek out an estate attorney to give you a bit of guidance here. Your financial professional might have a couple of contacts for you.
  12. Depending on your income level and your investment portfolio, you may need to consider some more tax-efficient ways of investing. Ask your financial professional or tax preparer.

  1. 59.5Another magic number with the government. You can generally access many of your retirement accounts without penalty however distributions from many of these accounts will still be taxed as ordinary income.
  2. Have you considered creating a “personal-pension”? There are some retirement products that provide a predictable and sustainable retirement income.
  3. Roth conversion. What is it and does it make sense to consider one? Again, ask your financial professional and or tax professional for direction on this.
  4. Did you know that in many cases 401k plans will now allow for “in-service withdrawals” even though you are still working? This is the ability to rollover a portion or all of your 401k assets into an IRA thus allowing your financial professional directly manage these assets.
  5. By now your “point-guard” should have been ensuring that your accounts are properly allocated based on your suitability and retirement planning needs on an annual basis.
  6. Make sure you take time to review all of your accounts beneficiary designation. This includes life insurance policies, annuities and employer sponsored retirement plans as well as any account that you have with any brokerage firms. I have heard too many horror stories.
  7. Review health care and long term care options/needs/costs.
  8. Your “Rainy Day” fund should have 3-6 months living expenses.
  9. Considering a cottage at the lake, or a winter home in a warmer climate? What is the most tax efficient method of funding this purchase?
  10. How about estate planning? Do you have a Will or Trust? Which one is right for you? Seek out an estate attorney to give you a bit of guidance here. Your financial professional might have a couple of contacts for you.
  11. Depending on your income level and your investment portfolio, you may need to consider some more tax-efficient ways of investing. Ask your financial professional or tax preparer.

Do I or don’t I start taking my Social Security Benefits?

  1. 62Consider the benefits of waiting to take Social Security.
  2. Is it better for me to file for mine? Or half of my spouses Social Security?
  3. Can I still file for half of an ex-spouse’s Social Security?
  4. You’ve worked hard to save for retirement, now how do you structure it to provide the income you need in retirement? Which account to you start taking income from first?
  5. Roth conversion. What is it and does it make sense to consider one? Again, ask your financial professional and or tax professional for direction on this.
  6. By now your “point-guard” should have been ensuring that your accounts are properly allocated based on your suitability and retirement planning needs on an annual basis.
  7. Make sure you take time to review all of your accounts beneficiary designation. This includes life insurance policies, annuities and employer sponsored retirement plans as well as any account that you have with any brokerage firms. I have heard too many horror stories.
  8. Review health care and long term care options/needs/costs.
  9. Your “Rainy Day” fund should be closer to 6 months of living expenses.
  10. Considering a cottage at the lake, or a winter home in a warmer climate? What is the most tax efficient method of funding this purchase?
  11. How about estate planning? Do you have a Will or Trust? Which one is right for you? Seek out an estate attorney to give you a bit of guidance here. Your financial professional might have a couple of contacts for you.
  12. Depending on your income level and your investment portfolio, you may need to consider some more tax-efficient ways of investing. Ask your financial professional or tax preparer.

  1. 65Medicare. Part A, Part B, Part C, etc..? What do they all mean? When do I have to enroll? Are there penalties if I don’t enroll on time? Your financial professions should be able to give you some guidance here.
  2. You’ve worked hard to save for retirement, now how do you structure it to provide the income you need in retirement? Which account to you start taking income from first?
  3. Roth conversion. What is it and does it make sense to consider one? Can also be a good tool for tax free wealth transfer, however may still be subject to estate tax. Again, ask your financial professional and or tax professional for direction on this.
  4. By now your “point-guard” should have been ensuring that your accounts are properly allocated based on your suitability and retirement planning needs on an annual basis.
  5. Make sure you take time to review all of your accounts beneficiary designation. This includes life insurance policies, annuities and employer sponsored retirement plans as well as any account that you have with any brokerage firms. I have heard too many horror stories.
  6. Review health care and long term care options/needs/costs.
  7. Your “Rainy Day” fund should be closer to 6 months of living expenses.
  8. Considering a cottage at the lake, or a winter home in a warmer climate? What is the most tax efficient method of funding this purchase?
  9. How about estate planning? Do you have a Will or Trust? Which one is right for you? Seek out an estate attorney to give you a bit of guidance here. Your financial professional might have a couple of contacts for you.
  10. How about life insurance as a way of transferring wealth tax free? And if done correctly may also avoid the possibility of subjection to estate tax.
  11. Depending on your income level and your investment portfolio, you may need to consider some more tax-efficient ways of investing. Ask your financial professional or tax preparer.

At this point, many investors start considering reducing their number of brokerage accounts down for ease of management. They might consider reducing the size of their home/yard for the same reason (smiling). Maybe a maintenance free condo?

  1. 66Full Retirement Age (FRA) Weather it be age 66 or 67, you can now receive your full Social Security benefits.
  2. Did you know that by deferring (delaying) your Social Security benefits from FRA to age 70 you can actually get an 8% annual increase to your annual benefit?
  3. You’ve worked hard to save for retirement, now how do you structure it to provide the income you need in retirement? Which account to you start taking income from first?
  4. Roth conversion. What is it and does it make sense to consider one? Can also be a good tool for tax free wealth transfer, however may still be subject to estate tax. Again, ask your financial professional and or tax professional for direction on this.
  5. May want to consider reviewing beneficiaries again to see if it makes sense to allocate a portion to a local charity that has had an impact on your life or funding a scholarship program at your alma mater.
  6. Your “Rainy Day” fund should be closer to 6 months of living expenses.
  7. Considering a cottage at the lake, or a winter home in a warmer climate? What is the most tax efficient method of funding this purchase?
  8. Annual portfolio reviews should still be taking place and by now you should have your estate plans in order. If you do not, it is not too late. Ask your financial professional for a bit of direction here.
  9. How about estate planning? Do you have a Will or Trust? Which one is right for you? Seek out an estate attorney to give you a bit of guidance here. Your financial professional might have a couple of contacts for you.
  10. It is still not too late to consider Life Insurance as a way of transferring wealth tax free. And if done correctly may also avoid the possibility of subjection to estate tax.
  11. Depending on your income level and your investment portfolio, you may need to consider some more tax-efficient ways of investing. Ask your financial professional or tax preparer.

And yet another magic number for the government. By now you have most-likely chosen one financial professional to handle all of your investment accounts. It generally provides for ease of management in Required Minimum Distributions (RMD’s).

  1. 70.5A RMD is required from most tax deferred investment/retirement accounts such as 401k’s 403b’s IRA’s and so on. If these distributions are not taken in the year required, they could be subject to a 50% penalty.
  2. Did you know that you can take the total RMD directly out of one IRA vs. taking it from each IRA? (understand that with 401k’s 403b’s and other employer sponsored account’s, the RMD must be taken out of each plan. This is one reason why many at this point make sure they have all of their employer retirement plans rolled over into IRA’s.)
  3. What about my Roth? Well if it is a Roth IRA, then no RMD is required, however this is not the case with Roth 401k’s. RMD’s are still required with Roth 401k’s.
  4. Roth conversion. What is it and does it make sense to consider one? Can also be a good tool for tax free wealth transfer, however may still be subject to estate tax. Again, ask your financial professional and or tax professional for direction on this.
  5. Continue your annual portfolio reviews with your financial professional and revisit the distribution amount ensuring that your funds out last you vs. the other way around. In many cases you have two lifetimes to consider and not just one.
  6. May want to consider reviewing beneficiaries again to see if it makes sense to allocate a portion to a local charity that has had an impact on your life or funding a scholarship program at your alma mater.
  7. More thought should be put into estate planning and wealth transfer at this point. Tax efficiency is a MUST as this can have a significant impact to what your legacy is that you leave for your loved ones is vs. what you leave for your Uncle Sam (lol).
  8. It is still not too late to consider Life Insurance as a way of transferring wealth tax free. And if done correctly may also avoid the possibility of subjection to estate tax.

As always, be sure to reach out to us if you have any questions.