Young professionals in their 20’s have time on their side. They are typically getting started in their careers and have a relatively low income. Often student debt is on their minds, as well as establishing a lifestyle that may include marriage and owning a home. The financial stresses of getting started in life may lead them to delay implementing financial habits that will serve them well down the road. The common refrain is, “I don’t have any money right now. I’ve got plenty of time to deal with all those other things.”
As the 30’s come, most have progressed significantly in their careers and begin to see good growth in income. Having a family and beginning to juggle all the responsibilities that children bring can cause a feeling that it is tough to get ahead… after all, kids are hungry and expensive! Often at this stage, 30 somethings are making big housing decisions and using their energy mapping out their career paths. “We just bought our ‘forever’ house, come talk to me when my kids are older, and after I get my next promotion.”
40’s are the decade of chasing the children from one event to the next. Family obligations are a dominant force in their lives, and the priorities seem endless. Finances are often set on cruise control and take a backseat to the hustle and bustle of everyday life. Lifestyle decisions are solidified. Debt and other financial obligations soak up all available resources. “I know I should be doing something, but I have other priorities for my money right now. I will do something more when things calm down.”
When folks hit their 50’s, the kids are headed off to college. They are dealing with a new reality of an empty nest and rediscovering the magic they once had with their spouse! The responsibilities at work can be consuming, and these are often the peak earning years. Helping children with the expenses of college can soak up any extra money, and lifestyle has expanded over the years to be very comfortable. Age 55 seems to be the magic time when people realize that retirement is now on the horizon. There may be some anxiety surrounding that idea because preparing for retirement has always taken a back seat to everyday life. “How can I get there from here?”
When the 60’s come around, the idea of retirement fully blossoms. When 60-year-olds start to seriously organize their finances to determine when the magic retirement date is, this is often when folks seek out some professional advice in the financial arena. For those that have followed the path above, the common refrain is “I wish I would have found you 30 years ago!!”
It is never too late, or too early to develop the good habits that lead you down the path to flexibility and financial freedom. Generally, retirement comes before people expect it to. There are health issues and other life circumstances that often keep us from working as long as we think we will. If you haven’t started in earnest, today is the best day to begin. Wherever you are along this journey, having advice along the way can be extremely valuable. Establishing a relationship with a financial advisor can help keep you on track as well as help you keep your thinking straight through the tough times in your life, economy or the financial markets.