What Your Age Means To Your Money

Financial Steps From Your 20s to Your 60s

Age is more than just a number when it comes to financial planning. Starting early can help give you a leg up on a comfortable retirement. This is particularly important for women because we live longer than men, are more likely to require long-term care services, and take more time out of the work force to care for children and family members. These financial realities make it even more important for us to start saving early, to save more as we earn more, and to plan carefully for those “time-out” periods.

In a Women & Co. study, women cited saving as one of their top money moves when starting out. To get started, take the Women & Co. quiz, Are You Taking the Right Steps Toward a Comfortable Retirement? and review these savvy steps provided by Lisa Caputo, Founder, Chairman and CEO of Women & Co., and Linda Descano, CFA®, President and COO of Women & Co., for investing in your financial future, at any age:

In Your 20s

Set Financial Goals. The first step to putting together a financial plan is to identify what you want, when you want it, and what it will take to achieve it. Be sure to write down your goals so you have something to refer back to as you plan. Ø

Live On a Budget. A budget doesn’t have to be onerous and it’s a key component of a solid financial plan. Start by writing down your monthly income, track and total how much you are spending monthly, and determine your debt-repayment obligations (i.e., credit card, student loans). After calculating your monthly expenditures, subtract that from your total monthly income. Allocate the amount you have left over toward savings. If you’re falling short on savings, think creatively about ways to cut spending.

Make Saving Automatic. Once you’ve determined your target savings amount, consider setting up an automatic transfer from your primary bank account to a dedicated savings account each month. Also, do not miss an opportunity to enroll in your employer’s retirement plan, such as a 401(k) plan, and take advantage of matching contributions, if available. Whether you have access to an employer-sponsored plan or not, consider an IRA.

In Your 30s

Set Up An Emergency Fund. Save and set aside enough cash to cover at least a minimum of 3, and ideally 6, months of living expenses in case of disability, unemployment or an unforeseen event.

Seek Out Professionals. Identify a team of professionals (i.e., financial advisor, accountant, attorney) that you feel comfortable working with. Ask friends and family for referrals and interview potential advisors. Once selected, regularly review your financial plan with your team and be sure to check in during any life transitions such as having a child, or getting married or divorced, as these events may impact your plan.

Define Your Investment Strategy. Work with your financial advisor to develop a target asset allocation for your portfolio. Tell your advisor when you would like to retire and discuss your tolerance for risk so that s/he can help you allocate your portfolio accordingly.