One crucial step is to review your retirement planning. You still have time to achieve your long-term goals, but you may need to save more aggressively if this has been neglected over the years.
Financial Wins in your 40s
If your working life was a round of golf, your 40s are when you reach the turn. The number of years you’ve been working and the traditional retirement age is almost equidistant from each other. It’s a pivotal point in the financial lifecycle, and the moves you make in your 40s can have a profound impact on your wealth in the future.
Financial planning can easily be forgotten. You’re likely to be juggling a career advancement, family responsibilities and other competing priorities. It can be a time of peak earnings, so your finances may be in better shape than earlier in life. You may have reduced personal debts but borrowed big on a mortgage.
There’s a lot going on, but by taking a proactive approach to financial planning you can set yourself and your family up for long-term financial security.
Are you on track to stop work when you want to?
Risk management
“Risk management is also important,” advises Jon Dodson of Pinnacle Wealth Management. “It’s a smart idea to ensure you have an adequate emergency fund as your capacity to fund unexpected circumstances is likely to be lower than your 20s or 30s. Having some money put aside is sensible should the worst occur.”
Protecting your family
You also want to ensure your assets and family are protected in the event of a tragedy. “That means reviewing your life cover needs or considering disability insurance to provide the peace of mind that your loved ones will be looked after if things don’t go to plan,” adds Jon.
Financial planning is a life-long process and these are just some of the factors to spend time reviewing in your 40s. Working with an expert adviser can help you create and maintain a financial plan, which will support your priorities and guide you towards achieving your goals.
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