As you approach your mid-forties, you might feel like you’ve hit your stride after spending your 20s and 30s settling into adulthood. By the time you’re 45, you may be at the midpoint in your career and are focused on numerous financial goals. This financial checklist can help you stay on track.
Assess and adjust your financial goals
The plans and priorities you had in your 20s are likely different now that you’re in your mid-40s. Take a fresh look at your current financial picture to set new goals or redefine existing ones. If you’re not yet on track to accomplish them, determine what strategies can help you kickstart your savings.
While long-term financial goals are critical, your short-term objectives shouldn’t be overlooked. These might include saving for a new car, a home renovation or an upcoming vacation. You may need to balance these more immediate priorities along with long-term saving and paying off debt.
Read more: Learn how financial advising can help you plan your financial future.
Maximize retirement contributions
By age 45, you may be at or nearing your maximum earning potential, and your progress toward retirement goals may start to have more clarity.
If you’re already putting a percentage of your income into a retirement fund — way to go! Assess your retirement funds to see if you’re making appropriate progress toward your goals. If you aren’t contributing or are a bit behind where you’d like to be, consider the following strategies to try:
Contribute enough to your 401(k) to receive your employer’s retirement contribution match, if available.
If you have debt, try to eliminate it as quickly as possible. The faster you pay off your debt, the more you can contribute toward your retirement.
Budgeting, whether you use an old-fashioned spreadsheet or a budgeting app, can help you identify areas where you can reduce spending and redirect that money toward your retirement.
Set up recurring transfers to automate funds into your retirement account.
Work with a financial advisor through Ally Invest Personal Advice to understand how you’re tracking.
Make time for estate planning
Many people put off estate planning, thinking it’s only necessary for older adults or those with significant wealth. But having a will can help you ensure your assets are distributed according to your wishes, rather than being dictated by state law. It’s also a good time to establish power of attorney and health directives so your legal and medical decisions are respected.
Review the beneficiaries on all your accounts to ensure they’re up-to-date since you’ve probably experienced some major life changes in the past decade, including marriage, divorce or the birth of a child. And depending on your financial situation, you may want to consider setting up a trust to manage your assets after you die.
Review insurance policies
It’s never fun to think about worst-case scenarios. At age 45, life insurance is important to consider since it can help protect your family or dependents’ financial wellbeing. Look for a policy that helps provide sufficient coverage based on your family's current needs, as well as their future expenses.
Additionally, consider disability insurance, which, in some cases, may replace a portion of your income if you become unable to work due to illness or injury. You should also review your auto insurance policy if you have a new driver in the family. Be sure that your medical insurance provides adequate coverage for all your family members.
Plan for major life events
Major life events — like upgrading your house, paying for private school tuition or college — often come with significant financial costs to juggle along with everyday expenses and other long-term financial goals. Setting up a 529 plan can help you maximize saving for college, and opting for a mortgage refinance may help ease the costs of home ownership down the road.
Seek professional financial advice
Some people prefer to manage their finances themselves. But for others, seeking help from a professional can bring peace of mind. Regular check-ins with a financial advisor can help you make informed decisions that align with your goals and lifestyle. For additional support, a financial advisor through Ally Invest Personal Advice can provide a comprehensive plan to manage your assets, providing assistance with estate, tax and goal-setting alongside investment management.
Secure financial success for decades to come
Navigating the various financial responsibilities you face in your 40s can seem daunting. But with the right tools and financial guidance, you can understand your progress toward your own unique money goals and work toward a secure financial future.
