By Barbara Pronin
By the time they reach their 40s, most people are earning more money, feeling more secure about career and life choices, and – though it still seems far off in the future – beginning to view retirement as real.
This is the time, say money managers, to take stock of your goals and resources and make important decisions about the future. From the Washington Post comes a list of five money milestones you should be aiming for now:
- Max out your retirement contributions – If you aren’t already doing so, this is the time to ramp up your contributions to the highest allowable level – especially if you haven’t been saving much on your own.
- Build up college savings for your kids – If you’re still making payments on your own college loans, this may be a daunting challenge. But socking away even a little money each month can ease the burden when your child’s turn comes. Even after scholarships and grants, the average college student will require an average of $24,000 per year.
- Talk with your parents about finances – It’s not an easy conversation to have, but knowing how much they have saved for retirement and what their preferences are for health care can give you more time to help prepare for any obstacles. If they haven’t purchased long-term care insurance, encourage them to do so now. If they can’t afford it on their own, think about pitching in to help them pay for it.
- Update your own will and estate plan – If you have a plan in place, life changes like divorce, remarriage, or a new child will require periodic updates. If you don’t have a plan in place, talk now to a lawyer or financial advisor about getting these documents in order.
- Review your life insurance – Life insurance is about more than protecting your spouse and children. Your policies should provide enough funds to protect your business, if you have one, as well as any tax bills that may be due upon your death.