If you are in your forties, then you might not be sure which generation you fall into; are you a late baby-boomer? Or are you a member of generation X? Regardless of which you fall into, now is the time to be thinking about your future and retirement. If you think that past twenty years have gone by quickly, then the next twenty will feel like they zoom by even faster. So planning now will make your later years easier and more stress-free, for you and your family members. So if you haven’t thought too much about it so far, then here are some financial planning tips for those in their forties that want to secure their future.
Build Up Savings
Having as much cash as you can saved is important for the future. You may be unsure of what will happen, so having some cash in reserve is what you need. Ideally, you will need around three to six months worth of wages saved up. This will help provide should you lose your job, as well as you will be prepared for the things you might need in the future.
It can be hard to be financially secure or financially free when you are tied down with debt. So as well as making sure you are saving, paying off any debt that you have, especially consumer debt, is really important. Of course, it is likely that you’re not going to be completely debt-free if you have things like a mortgage or car payments, but short-term loans and credit cards should be cleared as soon as you can. So look at what extra you could pay off each month and make a plan to get them paid off as quickly as you can.
Rethink Your Mortgage
If you are a homeowner and are wondering what you will have left to pay for things once you’ve stopped working but still have a mortgage, then you could look for a reverse mortgage calculator to help you out. This can definitely help cash-strapped retirees to generate extra money for living expenses. There are some high upfront costs, so a reverse mortgage is usually not a great option if you're borrowing a small amount or you plan to move in a few years. But it could help if you’re in a different situation.
Check Out Employee Benefits
If you are employed by a company, rather than being self-employed, then you need to make sure that you are getting all of the benefits of being an employee that you can. Some employers will match your payments into a pension, for instance. So if this is the case for you, you could really benefit from double the money, without it costing you anything extra. When you’re in your forties, you can pay quite large amounts into a company pension or 401K. So make sure you’re making the most of it.
Though the future might feel quite far off, it pays to make plans early on. So think about your retirement and where you see things going. Then you can make a plan to be able to live the way that you want when you’re no longer working.