Your Financial Goals from Your 20s to Your 70s

Hi Reader,

Welcome to The Money Series and if you are new here, thank you for signing up. Personal Finance can feel ambiguous and overwhelming, but I am here to help simplify the journey.

As we age, both biologically and physically, many aspects of life change—and our financial goals should evolve too. Today, let’s take a deeper look at how your financial priorities should shift as you move through different age brackets.

20s – Laying the Foundation

In your 20s, most people are starting their professional lives, and earnings may be modest. Hence, building net worth may seem difficult. In these years, you want to develop healthy money habits. It’s important to:

• Figure out a plan to pay off debt – student loans especially. Prioritize this above investment to allow you to take the needed risk in your investment portfolio.

• Strive to find a career (or a business) you love, where you can build experience and command higher earnings over time.

• Build good financial habits that would help build net worth over the years - Create a budget, automate savings, and track expenses to build discipline.

• Get financially literate and set up an emergency fund.

30s – Strengthening Your Financial Position

By now, you’re likely earning more but may face new expenses like childcare or mortgages. You should maintain the saving and investing disciplines developed during your 20s. In your 30s, it’s crucial to maintain those good money habits and get serious about long-term retirement planning.

• Continue to prioritize saving and investing even with added expenses.

• Beef up your emergency fund - at least 3 – 6 months of your financial baseline.

• Pay off student loans (if you haven’t already) and begin saving for retirement.

• Refine your long-term financial goals in the light of your current reality – marriage, family, kids.

• Start building credit – take ‘good’ debt (such as a car or phone loan) and repay consistently.

• If you have kids, start saving up for their college funds early.

40s – Avoid Lifestyle Creep and Diversify

Growing financial responsibilities can make building net worth especially challenging during the 40s despite increased earnings. However, it’s critical to stay focused on building net worth rather than allowing lifestyle creep to swallow up your gains.

• Resist lifestyle creep –  Don’t let higher earnings push you to spend more on luxuries.

• Start acquiring assets or financial holdings (real estate, vacation home, equity stake in start-ups) that can diversify your investment portfolio.

• If you have kids, start educating them on the value of money. Setting a regular allowance with saving goals can instill early discipline.

• Increase your retirement savings with higher earnings.

50s – The Final Stretch Before Retirement

Entering your 50s marks the beginning of the stretch run toward retirement for many people. The key is to start thinking about some of the finer details of your retirement and ensure your portfolio is ready for the years ahead.

• Focus on the retirement plan—Max out all the retirement contributions and tax-advantaged accounts.

• Estimate your annual retirement income needs and see where you can cut costs.

• De-risk your portfolio. Shift toward more conservative investments, like fixed income, to reduce volatility.

• Completely pay off consumer debt – all credit card balances; mortgage or car loans should be cleared.

• Review your healthcare plan at this stage. Review your health insurance policies and plan for out-of-pocket medical expenses including deductibles, co-pays, etc. Maximizing healthcare plans such as HSA in the US can keep expenses in check.

• Map out Your Retirement. Visualize what you want retirement to look like—where will you live? What activities will you pursue? How much will it cost?

60s – Time to Relax and Enjoy

You’ve spent decades saving and planning, and now it’s time to reap the rewards. This decade is about enjoying your retirement while staying financially stable.

• Think about your lifestyle—where you want to live, travel plans, and bucket list items—and match it to your financial reality.

• Determine the level of flexibility that your retirement savings can accommodate.

70s and Beyond – Managing Your Drawdown

At this point, you’ve likely retired, and the focus shifts to managing your withdrawals. Consider how you’ll tap into your savings:

• You can either withdraw a set amount of money each month or withdraw a percentage of the portfolio balance each month. With the first strategy, the amount of income is more predictable, which makes budgeting easier. However, you generally have more control over the portfolio’s overall drawdown and potential longevity with the percentage method.

• Again, check in on your portfolio trajectory. Are you on track? Do you need to make lifestyle adjustments?

It’s important to address that not everyone is in the same boat financially — we’re all in different places, trying to navigate as best as we can. But some basic blueprints and tentpoles to reach for are always helpful when thinking about our futures. From building healthy money habits in your 20s to managing retirement income in your 70s, this template should guide you in crafting your financial plan. Start planning, stay adaptable, and remember, it’s never too early or too late to take control of your financial future.

Feel free to send in your questions; you may be influencing the next newsletter!

Act Now:

• What phase are you in right now? Are you on track?

Reflect on This:

• How much do you think you need to retire successfully?

Till next week, I am rooting for you, money-ly!

Dee

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Disclaimer: This does not constitute financial advice. Please conduct your research or consult your financial advisor for important financial advice.