Financial Advice at Any Age
No matter your age, great financial advice can make your golden years the best years.
Your 20s
The best thing a 20-something can do to secure her financial future is to start saving, both in a personal savings account and a 401k. No matter what your job is or how much student debt you have, saving should always be a part of your plan, Lewit says.
“Every woman has to understand that they are expected to live longer lives than menfolk so their money has to last a longer time,” he said.
Lewit advises all 20-somethings to sit down and make a financial plan. If you haven’t already, take a course in financial planning. Having a good understanding of the economy and the stock market will only help you make smarter financial decisions in the future.
Whether it’s $100 or even $25 a month, contributing to a savings account every month will help you prepare for anything you plan on doing in the future, like moving across the country, buying a home or having children.
“Once you get started, it’s like a machine,” Lewit says. “It kinda builds on itself.”
Your 30s
According to Lewit, most women reach their peak earning years in their late 30s and early 40s. Therefore, saving should still be a priority, and you can still be a bit riskier in your stock portfolio because you’ll still have time to build it back up if you suffer a loss.
If you’ve bought a house, Lewit says, pay off the mortgage as fast as possible. In doing so, you’ll save thousands in interest over the years, and that’s money that can be put towards retirement, a college fund or something fun like a boat or a vacation home.
If you’ve decided to have kids and want to start saving for college, look into taking out a life insurance policy on your child. Lewit says some of his clients feel this is a bit morbid, but he adds that his son is currently doing this for Lewit’s grandson. By opening a life insurance policy and depositing money in it over the course of the child’s life, the child will build up a pre-paid college account and be able to borrow the money tax-free when it’s time to go to school.
Speak with a financial advisor for more about this type of saving.
Your 40s
For some women, the 40s bracket is a time for change. You may consider changing career fields or maybe you want to start your own business. In some cases, you may have been laid off or lost your job in your company’s downsize.
No matter what changes you’re making in your 40s, Lewit stresses how important it is to leave the 401k alone. Some people cash it all in after losing a job or when it comes time to pay for college, but Lewit likes to tell his clients, “You cannot touch that money.”
“Do anything you can, but save that money,” he said.
In your 40s, you should still continue to save, pay off that mortgage and start thinking about retirement, mainly what kind of life you want to have in your retirement. Do you still want the same lifestyle you have now? Will you travel more or take fewer vacations? Will you downsize your home or move out of the city? Start thinking about your future lifestyle and save accordingly.
Your 50s
Once you reach your 50s, retirement will feel closer than ever. Finally, you’ll get to relax a bit, enjoy your family and maybe ever travel more. Now, however, is not the time to be taking big risks in your stock portfolio, Lewit says. A big loss can seriously deplete your savings, which means you’ll either have to wait to retire or you’ll have to change how you live.
“Those years run by pretty quick,” Lewit said.
To keep yourself safe, reevaluate your stock portfolio, and choose stocks with less risks. If the economy should take a dive, you won’t feel the effects as badly. Lewit also suggests avoiding cashing out your 401k. Though it may be tempting, remember that the money is meant to last you through your golden years. Don’t cash it in until you absolutely have to.
If you haven’t been able to save as much as you’d like in your life (it’s okay, you’re definitely not alone), Lewit strongly advises against a risky stock portfolio. You may think you can earn your money back quickly, but you might end up losing more than you can afford. Lewit says planning out a slow and steady investment at a reasonable risk will benefit you more in the long run.