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 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
- 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
- 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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