Financial Planning by Age: A Checklist for Your 20s to 60s

Financial Planning Checklist by Age: Smart Money Moves for Every Decade

Throughout life, we all face important financial decisions, from starting a career to preparing for retirement. As your goals and priorities change, regularly reviewing your financial plan can help ensure it continues to align with what matters most. This checklist highlights key financial planning priorities for every decade of life.

Building Your Financial Foundation in Your 20s

Your 20s are an ideal time to start investing and establish healthy financial habits that can help set you up for long-term financial success and financial independence.

• Create a budget to understand your income, expenses, debt, and monthly savings goals.
• Build an emergency fund with three to six months’ worth of essential living expenses.
• Start investing early, even in small amounts, to take advantage of compound growth over time.
• Contribute to a retirement account, such as your employer-sponsored 401(k) or an IRA, especially if your employer offers a matching contribution.
• Establish good credit habits by making payments on time, maintaining a healthy mix of credit accounts (e.g., student loans or credit cards), and keeping your monthly credit utilization low.
• Identify your short- and long-term financial goals.

Balancing Growth and Stability in Your 30s

Your 30s often bring major life milestones. Regularly reviewing your financial plan can help ensure it continues to align with your goals and priorities.

• Review your health, life, and disability insurance to help ensure your coverage aligns with your current needs.
• Adjust your retirement contributions as your income changes to help ensure you have enough for retirement.
• Create or update your estate plan. Estate planning isn’t just for retirees or the ultra-wealthy; it’s for anyone who wants to ensure their wishes are honored and their loved ones are protected.
• Review and update beneficiary designations tohelp ensure they align with your current wishes.
• Review your employer benefits and available retirement plans.
• Revisit your short- and long-term financial goals as your priorities evolve.

Making the Most of Your Peak Earning Years in Your 40s

Your 40s are often your peak earning years, making it an important time to focus on your long-term financial plan and retirement goals.

• Increase your retirement savings by contributing more to your workplace retirement account and considering additional savings opportunities when appropriate.
• Identify your retirement goals and estimated retirement expenses.
• Review your investment portfolio and asset allocation to help ensure they continue to align with your retirement goals.
• Review your estate planning documents and beneficiary designations to help ensure they reflect your current wishes.
• Evaluate your financial goals and marginal income tax bracket to determine whether a traditional or Roth retirement account, or a combination of both, is appropriate.
• Review your financial plan at least once a year tohelp avoid planning mistakes and uncover new opportunities.

Protecting Your Wealth as You Approach Retirement in Your 50s

Your 50s are an important time to regularly evaluate your financial plan as you prepare for retirement.

• Take advantage of catch-up retirement contributions and continue increasing contributions to your retirement accounts when appropriate.
• Plan for a long retirement by estimating your retirement income needs.
• Consider when to begin collecting Social Security based on your retirement goals.
• Prepare for healthcare expenses by learning about Medicare options.
• Review your estate planning documents and beneficiary designations to help ensure they continue to reflect your current wishes and retirement goals.
• Review your financial plan at least once a year. Regular reviews can help you avoid planning mistakes and uncover new opportunities with your savings.

Navigating Retirement and Legacy Planning in Your 60s

Your 60s are an important time to bring together the key pieces of your financial life as you transition into retirement.

• Review your Medicare coverage and evaluate Part D prescription coverage and Medigap or Medicare Advantage plans to help ensure your healthcare needs are met.
• Decide when to claim Social Security based on your retirement goals.
• Review your retirement income strategy including Required Minimum Distributions (RMDs) and tax-efficient withdrawal strategies.
• Update your estate planning documents and beneficiary designations to help ensure they reflect your current wishes.
• Evaluate your lifestyle and location goals to help ensure your financial plan supports the next stage of life.
• Review your financial plan at least once a year. Regular reviews can help ensure your plan continues to reflect your goals as your needs change.

Key Financial Milestones for Every Decade

Financial planning is an ongoing process that evolves with each stage of life. As your goals and priorities change, regularly reviewing your financial plan can help ensure it continues to align with what matters most.

• Review your financial plan regularly.
• Adjust your retirement savings and investment strategy.
• Update your estate planning documents and beneficiary designations.
• Review your insurance and healthcare coverage.
• Revisit your financial goals after major life events.

When to Partner with a Financial Advisor

Throughout life, we all face important financial decisions. Working with a financial advisor can help you build a customized financial plan that evolves with you.

You may benefit from working with a financial advisor if you:

• Experience major life events, such as marriage, parenthood, career changes, retirement, or unexpected illness.
• Need a customized financial plan that aligns your financial decisions with your long-term goals.
• Need help diversifying, rebalancing, and managing your investment portfolio as your financial needs evolve.
• Want to preserve wealth for future generations and help ensure your legacy continues.
• Want ongoing guidance through regular reviews and adjustments to help keep your financial plan on track as your life changes.

Don’t wait to plan your future. Schedule a conversation with a financial advisor and start building your financial roadmap today.

FAQ

What’s the ideal checklist for financial planning?

A financial planning checklist should evolve with each stage of life. It should include setting financial goals, saving for retirement, reviewing your investment strategy, updating estate planning documents and beneficiary designations, and regularly reviewing your financial plan.

What are the 7 steps of financial planning?

1. Identify your short- and long-term financial goals.
2. Build a financial plan that aligns with your goals and priorities.
3. Save and invest for the future.
4. Protect your assets through insurance and estate planning.
5. Prepare for retirement and retirement income.
6. Review your investment strategy and retirement plan.
7. Review and adjust your financial plan as your goals and priorities change.

What is the 50/30/20 rule in financial planning?

The 50/30/20 rule is a simple budgeting method that allocates 50% of your income to needs, 30% to wants, and 20% to savings or debt repayment. This approach can help balance your spending while making steady progress toward your financial goals.

What are the 5 steps of financial planning?

1. Establish your financial goals.
2. Build a financial plan that aligns with your goals and priorities.
3. Save and invest for the future.
4. Prepare for retirement.
5. Review and adjust your financial plan as your goals and priorities change.