Financial Milestones for Each Decade

As you can imagine, a 20-year-old’s financial concerns are usually quite different from a 60-year-old’s.

Here’s a glimpse into financial security issues at five key age milestones. Of course, you can accomplish any of these goals sooner, but look at this as a general roadmap of where you should be at a given age.

Your 20s

Save money every month. Put some of your paycheck into a savings account. Choose a debit card with cash-back rewards to save more.

Build credit. Get a credit card with a low borrowing limit and use it regularly, but pay it off monthly.

Establish a Roth Individual Retirement Account (IRA) even if you have to ask your parents to help you fund it. Start a 401(k).

Start paying down student loans. Make it a top priority once you have a steady income.

Allocate income to marriage and children. Not all people get married in their 20s, but if you are contemplating this life change, you’ll need to adjust your budget. Open a savings account to save for your dream wedding.

Your 30s

Buy life insurance. Even if it’s a small policy.

Set up an emergency fund. Save enough to cover 6-9 months’ worth of income so that if you or your spouse loses a job, has a serious medical problem or becomes disabled, you can still pay the bills.

Boost your retirement savings. Ramp up your savings—put in at least 15 percent of each paycheck.

Work with a Financial Planner. You’re at a point in your life where you need to start prioritizing your goals and getting advice about your estate plan.

Your 40s

Get Term Life Insurance. Start thinking about how you would provide for your family should something unexpected happen to you. Term life insurance ensures that your funeral costs will be covered, and your spouse and kids will have access to your assets should you die prematurely.

Invest with an eye toward the future. Make your investments less aggressive.

Buy a vacation home because you earn money for a reason. And it might make you a dollar later.

Erase credit card debt. If you have kept revolving accounts open for their credit benefits, make sure you are paying off the balances in full every month in order to free up income and keep your credit score high.

Your 50s

Make retirement catch-ups. If you’re 50 or over you can make up for a bit of lost time with catch-up contributions to your tax-deferred retirement accounts.

Pay off your mortgage. If you still owe any money on your house, now is the time to pay it off, so you can enjoy your home during your retirement. Paying off your mortgage now ensures that you won’t have to delay retirement in order to afford mortgage payments.

Plan your estate. You should already have a will, but if you don’t, get one drawn up as soon as possible. You may also want to put some of your assets in trusts or other estate planning tools to ensure your heirs can get them in a timely manner.

Your 60s

Apply for Social Security. Benefits are available as early as Age 62. At age 65, you should apply for Medicare coverage.

Sell unneeded assets. Sell vacation homes and other assets you no longer want or need; this can help you reach your retirement savings goals sooner.

Get a retirement career. Find something that pays in a field that you like—such as a ski resort, a nursery or an art gallery. You’ll draw less from your savings.

Get big discounts. Take advantage of senior pricing at shops, restaurants, and entertainment.

Resources: Huffington Post, Forbes Magazine