Personal Finance Tasks by the Decade "Credit News 24" | Credit News 24

Personal Finance Tasks by the Decade "Credit News 24"

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Personal Finance Tasks by the Decade "Credit News 24"


Although actual timing will vary from person to person (e.g., I completed a Ph.D. program in my 40s), below are some suggested financial milestones to achieve during each decade of adult life. Milestones achieved at an earlier age (e.g., a good credit score and an adequate emergency fund) should continue during subsequent years.

Age 30                

  • Financial independence from parents (e.g., independent living arrangements and no “subsidies” to pay household expenses such as insurance premiums and cell phone bills)
  • Student loan debt completely repaid or close to repayment (e.g., standard 10-year repayment plan)
  • A year’s worth of salary (1x) saved for retirement
  • A good credit history established with a credit score in the low- to mid-700s or higher
  • Regular saving/investing and at least three to six months of income set aside for emergencies
  • Educational credentials earned or near completion (e.g., certifications and graduate/professional degrees)
  • Have current estate planning documents and life insurance to protect dependents or co-signers, if applicable
     

Age 40

  • Three times annual salary (3x) saved for retirement; saving at least 15% of gross income
  • College savings established for children, if applicable
  • Increased investing expertise and diversification of investment portfolio assets
  • Increased human capital (i.e., job skills and knowledge) to remain employable and earn promotions/raises
     

Age 50

  • Six times annual salary (6x) saved for retirement; making catch-up retirement savings plan contributions
  • Increased knowledge about the specifics of Social Security, Medicare, and employer retirement benefits
  • Increased knowledge of aging parents’ finances and communication about caregiving-related issues
  • Use of financial advisers, as needed, as net worth increases and finances become more complex
     

Age 60

  • Eight times annual salary (8x) saved for retirement
  • Paid off mortgage, home equity loan, and credit card debt prior to retirement
  • Catch-up retirement strategies used, if needed (e.g., downsizing, moving, working longer, and selling assets)
  • Learning new skills and/or making other preparations to transition to a “second act” job or volunteer role
     

To learn more about age-based financial planning milestones from age 0-10 through 90-100, read “Money Milestones for Each Decade” (Reuters).


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