Is 40 the “Magic” Age for Financial Planning?

 When is Financial Planning, on your own or with the help of a professional, appropriate? The correct answer is you should probably begin saving the first day that you receive your first paycheck.  However, in my 23 years of experience, folks tend to get “serious” about planning near the age of 40.  I do not by any means want to discourage anyone younger than 40 to put off planning until they hit that “magic” 40 milestone. Just about anyone that has achieved financial success will tell you to start as early as possible.

Some questions and issues that the 40+ crowd might consider: 

  • How much should I be saving? I have heard rules of thumb such as 10% or 20% but what does that mean for me and my specific goals?
  • I’m busy. What are the options to pay bills other than the standard envelope and stamp method?
  • Life insurance: Salespeople have been hounding me for years to buy life insurance. I couldn’t afford it in the past and secretly didn’t see the value, but I’m ready now. What type and amount should I get to protect my family so I am not insurance rich and cash poor?
  • College: My kids are getting closer to college age. How do I pay the ever-increasing tuition?
  • I am ready to invest my wealth. What are best options for me?  Should I max out my 401k or 403b or is a ROTH a better option?
  • Estate planning: I’m all grow’d up now and ready (I think) to consider a Will and perhaps a Living Trust. How do I know which one I need?
  • My parents are aging and I am not sure if they have the resources for their care. What should I be doing now to prepare or help them prepare?
  • I have heard about the “Boomerang kids” phenomenon. Should I move to a one bedroom condo now?
  • Employer retirement plans (401k/403b): Whoa, I have real money now! How should it be invested?
  • I give to charities that are making a difference in the world. Is there a way to maximize my donations and perhaps even get a tax break?
  • Income taxes: I don’t mind paying … I just don’t want to pay a cent more than my share. How can I limit my income tax exposure?
  • If I choose to work with a professional financial planner whom should I contact? I have not have worked with a professional advisor yet so I am a bit leery, and maybe even a bit scared to share my financial picture (not sure how I stack up with others).

If you’ve been asking yourself some of these questions, no matter your age, you are ready to get “serious” about your financial life.  Think about some of the issues and questions that you find yourself facing and feel free to give me an email. If my 23 years of working with similar folks can be of help, I’d love to share my insight because you don’t need to wait for some “magic” age.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a frequent contributor to national media including appearances on Good Morning America Weekend Edition and WDIV Channel 4 News and published articles including Forbes and The Wall Street Journal. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), trained and mentored hundreds of CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.


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