Age Based Planning – 40’s

Financial Planning

Sep 24, 2020

Your 40’s are a time in your life where the financial decisions get larger and hopefully, your salary has grown with them. You have decisions to make regarding your children’s education, you may be considering a second home and you may be starting to think of when you would like to retire. The 40’s are the prime earning years for most couples and the choices you make with those earnings will impact many important aspects of your life.


Retirement & Investment Planning

You may have gone through your 20’s and 30’s with the attitude of throwing as much as possible at retirement and investing aggressively because you’re young. As you move through your 40’s and things start to happen, you should probably give your whole strategy a little bit more attention if you haven’t already. It is not too early to start thinking of how much money you need to retire. Furthermore, you should really take a look at the risk in your portfolio and review your asset allocation.

If you started saving early and are seeing the rewards of compounding interest, maybe you are wondering if you have a chance to retire earlier than most people’s target of 65 to 70 years old. There are many things to consider, particularly in regards to healthcare and social security. The costs of healthcare add up quickly, especially if you retire before you are eligible for Medicare at age 65. You’ll also have to think about when the best time will be to start social security.

The last thing that you may be weighing that can impact your retirement or investments is a major purchase. Maybe it’s a toy automobile, a vacation home or an upgrade to your primary residence. Regardless of what it is, try to be smart about it and think about where it fits into your long-term plans. That toy automobile may cost you quite a bit in the long run, but maybe it is worth it to you. The vacation home or upgrade to your primary residence could very well fit into your long-term plans. Regardless of that, make sure you weigh out the costs associated with your new endeavor including the opportunity cost.

Education Planning

Paying for education is undoubtedly a major expense. If you send your children to private school from K-12, those expenses really add up. Then you throw college on top of it and the numbers will make your stomach turn. You have to be realistic and prioritize. Our advice is to not completely disregard retirement saving for education. Furthermore, we strongly discourage withdrawing funds from retirement accounts to pay for education.

Estate & Insurance Planning

Depending on where you stand financially, your estate and insurance planning can be more significant. Maybe you sold your business or have accumulated assets in other ways. Regardless of that, it is critical to remember estate planning as your wealth increases. Maybe you need trusts for your children or need to update your wills. You may want a life insurance policy to cover projected estate taxes. You worked hard to build up what you have. Take the time to talk to the right professionals to ensure that you protect as much of it as possible.


As you get older and build wealth, the financial aspect of your life gets more complicated in a good way. You have things to think about that you may have never thought you would have to. If you were fortunate enough to put yourself in a position to have to consider some of the issues outlined above, be grateful for it and take the time to get organized. The proper planning and attention can set you and your family up for financial success over the long term.

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