This is the second post of my Turning 40 series. As I stated in my first post, I am turning 40 this fall. I read somewhere online that turning 40 is kinda like half-time in a football game. You have already played the first half and now you have to plan for the second half…of life. Hopefully I live longer than 80, but turning 40 is definitely a time to reflect on my future. But thinking of my financial future includes my husband, so this check list is really for both of us.
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
- Preparining for my Big 4-0.
- A Women’s health checklist for Turning 40.
Disclaimer: I am not a financial professional. Please contact a professional if you need help planning your future financial needs.