What You Should Know About Money in Your 40s
Learn about managing and saving money in your 40s with these tips from Citizens Bank
When you're in your 40s, you may feel your finances are stretched in different directions. From planning for your children's college educations to saving for retirement, money management in your 40s is multifaceted. Review your financial goals and current strategies, then use these tips from Citizens Bank to make sound financial decisions in your 40s. We’ll help you choose the most appropriate banking options for your financial planning needs.
Prepare for financial milestones by anticipating the expected costs
With many conflicting expenses and events to prepare for, financial planning in your 40s can seem like a puzzle. To ensure you are making the right money management decisions, it’s a good idea to anticipate approaching milestones that will require your attention. The following are a few life events you may need to plan for financially:
- College costs – If your children are heading to college soon, consider having a conversation with them about their college savings accounts, how much you can contribute and the costs they will incur based on the institution they choose. If you are looking for a way to further grow your children's college savings over the next few years, opening a CD (certificate of deposit) could be an effective means of meeting your goal. Though most CDs have strict policies regarding early withdrawal, you can choose a maturity date that falls before your child’s college years.
- Your retirement – Though it may still seem far away, your 40s could be a decade of peak earnings potential, giving you the opportunity to maximize your contributions. Saving for retirement in your 40s should be focused on increasing your nest egg. If your company offers 401(k) matching, maxing out your contributions is an easy way to build your savings, as is opening a new IRA account. Along with increasing contributions each year, consider reviewing your current retirement plans with a financial professional to see if you need to make adjustments.
- Retiring parents – Forty-somethings can sometimes struggle to strike a balance between managing their financial needs and the needs of their parents and children. This might be the ideal time to talk with your parents about their retirement accounts, future plans and anticipated need for financial support. Once you have this conversation, you can factor this information into your money management strategy to prepare for the needs of your family.
Re-evaluate your overall strategies for money management in your 40s
Ideally, you should re-examine your financial planning strategies several times each decade to account for any new factors that may arise. The following tips are helpful when considering your financial habits in your 40s:
- Refine plans with a wealth management professional – Meeting with a financial consultant during your 40s is a great way to make sure your money management strategies are appropriate to address your specific needs. Citizens Bank offers comprehensive wealth management assistance, including retirement planning, education planning, general investing information and more. Our financial consultants can help you review the array of available investment opportunities to create a personalized financial plan for the future.
- Examine strategies for paying off long-term debt – It's important to review your plans for paying off long-term debts, even if the planned payoff date is decades away. One strategy to consider is prepaying your mortgage whenever possible, as it may help you save money on interest in the long run and reduce your debt-to-income ratio as you enter retirement. Plus, Citizens Bank does not charge prepayment penalties, making it even easier to pay off long-term debt.
- Set up a savings plan – As your expenses evolve, your plans to meet savings goals should evolve, too. With the Circle Gold Banking® package from Citizens Bank, financial planning in your 40s can be more streamlined than ever with exclusive banking benefits, including an interest checking account, savings account and optional money market account. Plus, when you use savings tools such as GoalTrack Savings® and SteadySave®, you can easily set up a savings schedule and automatic transfers to reach your savings goals in a timely fashion.
Open a new bank account from Citizens Bank to manage money in your 40s
When you're deciding where and how to invest money in your 40s, the options might seem overwhelming. With Citizens Bank, you can easily compare bank accounts online to find the right balance of checking and savings accounts for your needs. If you have further questions about how to open a new bank account or how we can assist with financial planning and saving for retirement in your 40s, contact a Citizens Bank customer service representative today.