John Gajkowski, Certified Financial Planner™ and Principal of Money Managers Financial Group
Phone: 630-990-7171 | E-mail: firstname.lastname@example.org
If You Are Single And Working…
The first things someone should do when they are new to the work force are:
Develop a savings, investment and debt reduction plan and begin putting 10 to 15 of your gross pay toward accomplishing those financial goals.
Start saving for retirement. Open a 401(k) and contribute the maximum amount that will be matched by your employer. Then fund a Roth IRA.
Continue to invest. Any additional money can be invested in non-retirement accounts. Time is your biggest asset so invest with a focus toward growth. Investments will go up and down, and that’s good – because it allows you to buy things on sale!
If You Are Married With Children…
These are the years where expenses can add up, so money needs to go as far as possible.
Continue to invest 10 to 15 percent of your gross pay in your 401(k), up to the match, then Roth IRA, and then into your investment portfolio.
Plan for your children. If you’re going to save for your children’s education, start early and take advantage of the various tax advantageous alternatives for funding education. Be sure to have a life insurance policy in place too.
Save where you can. To save money in fees, don’t piecemeal your insurance and investments. Instead consider using one company or an advisor to help you make sure that you’re not paying more than you should and that there are no overlaps in coverage.
If You Are Approaching Retirement…
These are the years to sharpen your plan for retirement. If you haven’t already, it’s time to determine what you want your retirement to look like, when it will start and how much it will cost.
Take a comprehensive look at all of your investments. You may have a couple 401(k)s, a few brokerage accounts, etc. Evaluate them all for:
risk vs. reward
allocation and any overlap
stated and internal expense
ownership and beneficiary designations
Focus on building your portfolio to minimize risk while outpacing inflation.
Continue to save 15 percent of your gross pay or more for retirement.
If You Are Retired
It’s time to change focus from accumulation of wealth to de-cumulation of wealth to provide a secure income stream in retirement.
Create an income plan:
Identify required expenses and desired expenses in retirement.
Determine all of your income sources in retirement, including Social Security, a pension, part-time work and your savings and investments.
Determine what percentage of your monthly income you want “guaranteed”
Structure you investments to minimize the sequence of return risk and to allocate assets to provide the guaranteed income you desire.
Planning and investing are more complicated and challenging than ever, and you only get one chance to do this right. Be sure to seek the help of a qualified financial professional to help you make sure you’re on the right track.