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An essential first step for younger workers is to create a savings and investment plan. A good goal would be to live on 94% of your income, thereby saving at least 6%. Having a plan to balance savings and spending may also help reduce the risk of falling into debt, especially credit card debt.
Consistency is key in savings and investing with regular contributions to your retirement plan to pave the way to financial independence.
Individuals in their forties and fifties can find themselves in the “sweet spot” to create a financial plan. A carefully crafted, comprehensive financial plan will indicate if you are on track with your financial goals. Another tip would be to review your estate planning documents to see if any updates are needed.
It is important to review your overall portfolio expenses on an annual basis. Paying attention to how much you are paying in fees and commissions can lower the cost of investing and allow more significant future savings.
Individuals in their early 60’s may benefit from a financial plan, especially with Medicare and Social Security benefits on the horizon.
Most individuals will be shifting from wealth accumulation to wealth distribution. The distribution plan should take into consideration taxes and investment expenditures. Focusing on these two key areas may help create greater efficiency in your after-tax distributions which may help your savings last that much longer.
It is never too early or too late to start a financial plan. The first step is to write down your financial goals and then create a clearly defined pathway to bridge where you are at today, to where you want to go in the future.