Huge Financial Missteps You Want To Avoid As You Age
We tend to make financial mistakes but those mistakes differ by age. In my firm, we work with all of our clients to manage through the challenges that exist as they get older. Here’s a look at what I see people doing wrong and how you can do better. Every new stage of life brings new financial strategies we need to adopt. And at every stage we find new ways not to follow those strategies, costing ourselves money and jeopardizing our security. The Not-So Roaring 20's At the beginning of our careers, we need to be aggressive with our investing in order to build a long-term portfolio that can grow over the decades ahead. Unfortunately, because they’re uncomfortable with big risks, studies indicate that today’s 20-somethings delay investing or make very conservative investment decisions. Both are damaging to their long-term well being. The 30's...Married With Children These days more people are waiting until their 30s to make the commitment to life-changing events like marriage and children. When they do, a series of sudden and complex financial issues and questions start appearing all at once, and thus there becomes plenty of opportunities to make mistakes. The 40's Bring Big Bills and Confusion When we get to our 40s, significant financial issues arise. One example we see is that often folks fail to pay down or off their mortgage quickly enough, which has the effect of having them paying those costs into retirement. The other big ticket issues that they fail to plan for include college expenses, or the cost of providing for children and aging parents at the same time, and how these will affect their finances. The 50's and 60's: Reality Kicks In...How Are YOU Doing??? By the time we arrive at our 50's and 60's reality may begin to kick in that we are behind in what we need for our retirement savings, sometimes because we’ve lived beyond our means, or we've launched late, ambitious career goals such as starting a business. This is the time to acknowledge reality and re-evaluate your long-term plans. The 70's and Beyond: Protecting What You Have Built Finally, we arrive into our retirement years, but I see people struggling with making an uncomfortable but necessary move once there. Many aging people need to proactively consider asking trusted family members to assist them in making key financial decisions. This step avoids scammers targeting the elderly, as well as improves the chances of a devastating error occurring that can cost hard-earned financial reserves. My recommendation on all of these is to find a trusted person who can assist you through these various phases of life. For some, entering into a relationship with a financial advisor can address these issues. Financial advisor firms like ours focus on assisting our clients through these phases and we take great pride in hearing clients talk about their increased confidence and clarity about their future. I suggest selecting a person who has lived through at least some of these phases themselves and can provide strategic and proactive advice to hopefully avoid the major mistakes that are in weeds waiting for each of us.