When will we retire? What do we want our retirement to look like? Will we stay where we live now? Do we want to become snow-birds and fly south in the winter? Will we travel? Will we work, volunteer, or both? Now is the time to dream a little.
A financial checklist for turning 40.
- Get the debt under control. Our mortgage will be paid off in eight years, but we don't have a plan for our next vehicle when the need arises. And my husband's student loan is still out there sucking the wind out of my sail.
- How much money will we need in retirement? Are we saving enough? I used this retirement savings calculator and realized that even though we max out our Simple IRAs, we may not be saving enough for when we retire. Be prepared, because the calculator will ask you questions like, "what percentage of current income do you want to replace?", "how much retirement income will you receive from social security and pension?", "how much retirement savings do you have now?" Do you keep the statement you receive a few months before your birthday from the Social Security Administration? That is where you'll find information about what they are projecting you to receive from Social Security.
- Are our retirement funds allocated properly? I always thought I could accept some risk, but after watching our funds drop so much in the past year, I am not so sure. I didn't stop investing in our IRAs though, I guess I have been buying the funds on sale. I have always been a sucker for a good sale.
- Will we contribute to our girls' college education? How much do we need to save?
- When the kids start school full-time, will I go back to work full-time? See #1, #2 and #4...I'm thinking that is a YES.
- What career path will I take? My work experience is in retail. I'm not sure I want to go back to that. I guess it is a good thing that I have a few years to ponder this question.
- Are we properly insured with life insurance? Should we look into long-term care insurance? I can't be that OLD yet... am I?
We are left with more questions than answers, but a place to start. Why is financial planning a constant process??
To my 40+ year old readers out there, do you have any additional items for my financial checklist that I might be missing?
Turning 40 - The Series
Disclaimer: I am not a financial professional. Please contact a professional if you need help planning your future financial needs.Thanks for reading FamilyBalanceSheet. If you don't already receive FBS free updates, please click here to sign up.