There's a lot of talk of wise investments, but often these conversations focus on very general advice. The reality is that the right moves to make to secure your financial future will vary based on your current financial situation, the type of lifestyle you'd like to continue after you retire, and your current age. We're going to focus on the third part of this equation and give you specific steps you can take in your 40s, 50s, and 60s, to ensure you have the bright financial future you deserve.

Financial Planning in Your 40s
Maximize Savings

When you hit your 40s, it's time to focus on maximizing your savings. If you have a 401k that an employer contributes to, then it's time to increase your contribution as much as possible. It's recommended that people also put aside 10% of their salary in a private retirement account. If you reach your 40s and haven't started yet, then you may need to put more in. Think of it this way: A 40 year old who wants 1 million dollars by the time they turn 67 will need to put $10,000 in savings per year and get at least a 9% return.
 

Financial Planning in Your 50s
Prioritize Savings Versus Debt Repayment

For many people, the peak wage-earning years come in their 50s. They've often been in their careers for 30+ years and are making as much as they'll ever make. You'll also see many people in their 50s transitioning from a household with children to children going away to college or moving out on their own – which means lower monthly expenses at home. With maximum income and lowered costs, the 50s can often be the ideal time to make significant steps toward financial security.

 

Around 85% of people in their 50s owe money. They may have a mortgage, a car loan, credit car debt, or other type of obligation. The big question is often: Should I save as much as I can or should I pay off my debt first? The answer is quite simple: In almost every case, it makes sense to pay off your debt first, for several reasons:

• You will almost always pay more in interest on the money you owe then you'd earn in interest by saving that money.
• The more you can reduce your financial obligations during retirement, the less money you'll need to save for retirement.
• Paying off a mortgage means you can likely borrow against the home in the future if a serious financial crisis occurs.
Start by paying off your debts that have the highest interest rates, which will save you money in the long run.

Financial Planning in Your 60s
Reallocate Investments and Payments

It's likely that in your 60s you'll start to see debts paid. For example, you may finally pay off your mortgage completely or you may pay off a vehicle. Any time you have a monthly payment that no longer needs to be made, take special note of that money. It should immediately go into your retirement fund, every month. By reallocating these funds immediately, you'll be saving more without reducing your monthly income.

 

You'll also need to consider reallocating investments. Younger investors can take bigger risks because they'll have more time to wait out the market. However, once you're in your 60s it's best to focus on investments that have much less risk so you can retire as planned.

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Remember that your age is only one factor that plays a part in deciding which financial advice is best for you. You'll also need to closely look at your current income and how you plan to live after you retire. These three parts of the equation will come together to give you solid financial planing advice.

 

Utilizing a mortgage calculator with taxes and insurance is a good tool to determine the home loan piece of the financial planning puzzle.  By minimizing the amount of interest paid out and maximizing your cash flow in your retirement years, you can set yourself up for retirement.​ 

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