Financial Literacy

Why Financial Literacy for the ages is important

Financial literacy skills a boost for better informed financial decisions and habits. Keep in mind, relevant financial subjects for you may shift depending on your age. For example, those who are in their 30s may be at a different place of understanding than those in their 50s and 70s. It’s important to try and understand the basics no matter where you are in life.

Growing your financial knowledge is an ongoing commitment, but what you put in often comes back to you tenfold. Thankfully, there are a large variety of resources available, from podcasts and social media groups to budget apps, personal finance books and the financial professional you are working with. 

As you begin to build your financial know-how, confidence to tackle what used to be outside your comfort zone, like making money decisions that help you achieve your short and long-term goals, is sure to follow. Plus, when meeting with your financial professional, you may now feel empowered to join the conversation and take an active role in your financial planning. After all, you are in the driver’s seat to build your best life now and down the road so you can retire your way. Here are several ideas for achieving financial success at every stage of life.

Proactive planning in your 40s and 50s

As you enter further into adulthood, your priorities may shift toward family life and planning for retirement. Oftentimes, you are in your peak earning years.

 

This is the time to:

  • Learn how to maximize income and choose savings vehicles that can help you meet your current and future financial goals
  • If you have young children, it’s never too early to start exploring how to save for higher education costs, like using a 529 plan or an annuity
  • Take a proactive approach to educating yourself about your savings options to help ensure you’re not left with income gaps when retirement does arrive
  • Begin supporting charities that are important to you if you haven’t already, as helping others and using your means to help other’s lives is its own reward

Financially savvy in your 20s and 30s

For those of you who are just starting out or perhaps gaining momentum in your career, you have an opportunity to create a strong financial foundation that you can build upon for years to come. The healthy habits you create now can have lasting effects as you enter the later stages of your life.

 

This is the time to:

  • Find a financial professional and gain a deeper understanding of different financial accounts and how they work, including 401(k)s, IRAs and annuities
  • Learn how to properly budget, keep it on-track and manage debt
  • Explore the basics of investing, including risk tolerance, how interest works and market volatility
  • Start saving early – contributing whatever you can to your employer’s 401k or IRA – as compounding interest is a gift that will serve you well over time

  • When you can gain a better understanding of these concepts, you can see how they can affect your overall financial plan moving forward

Reevaluating retirement in your 60s and 70s

All your hard work is paying off and you may be ready to start the next chapter, retiring to your best life yet. While this accomplishment is exciting, financial planning and education doesn’t completely come to a halt.

 

 

This is the time to:

  • Think about what will bring you the most happiness in retirement and start.
  • Revisit your financial plan and take a look at your sources of income, including Social Security and other retirement savings vehicles to see if these numbers still match your expected expenses
  • Consider what could be a drain on your budget in retirement such as health care, insurance and housing costs, and whether your financial strategy has enough allocated for these expenses
  • Take a couple weeks of to do a “retirement simulation” to test-drive your retirement and help you determine what you will do and how you will spend your time. See how you like it, if the time is right and if you need to adjust your savings for the retirement lifestyle you want.

No matter where you are on your journey, making financial education a priority will be time well spent. Your financial professional can be an important advocate in helping you understand the basics, as well as breaking down more complex scenarios. The first step is to begin, to help you achieve your best life.