NDSU Extension Service - Ramsey County


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Mid-Life Financial Checklist

Mid-Life Financial Checklist


                Congratulations! You’ve made it to the mid-point in your career and life! You are some place between 35 and 50 years in age, have been working at a career you enjoy (you may change jobs but you are focused on one type of work) and have earned some control over your budget.  It might seem that you don’t have as many financial decisions to make as those just entering the workforce or as those approaching retirement, but you too have some financial dos and don’ts to keep in mind. While this age range are building their career, family and lifestyle, they also encounter the benefits of higher income. One financial study found that most people spend more time planning their vacation each year than they do planning their finances.

                Following is a checklist of questions you should ask yourself during this critical time when you can shape your financial future for the rest of your life. Hopefully you already answer “yes” to the basic questions of personal finance.

                - Do I live below my means?

                - Do I have a cash reserve for emergencies or unexpected expenses?

                -  Am I making the best use of employer-provided benefits?

                - Is my family protected if I die or can no longer work?

                After you have these basics down, you can then continue with future plans such as saving for your children’s college education.  As with other savings plans, the earlier you start the less you'll have to save. Let the power of compounding pay for a good size chunk of the expense by starting to put funds away when your kids are very young.

                Hopefully by the time you're mid-career, you're well-established in your employer's 401(k) or other retirement plan. Take advantage of your employer's 401(k) plan or other tax-deferred retirement plan. Your contributions will be made with pre-tax dollars and taxes on earnings will be deferred until you withdraw them during retirement. Even better, many employers will match all or part of your contribution, which results in huge gains for you.

                Mid-career is a good time to estimate how much income you'll need to live on after retirement. Keep in mind that people are retiring earlier and living longer, so you may need more money than you think. Will your mortgage be paid off by then? If so, you may need considerably less income than you do now. Do you plan to buy a vacation home or travel extensively? How much money will be required to do this? After you retire, you may have to pay for your own health insurance, which can be very expensive. Have you factored this into your estimates?

                If you haven’t done so yet, make a will.  It is vital to draft a will, and to make provisions for what happens if you become incapacitated in some way. Make sure that survivors know where this information can be found, and that a couple of trusted people have copies.

                And lastly, keep your skills sharp. Continue learning so that you are up with technology, industry trends and certifications. Even if you aren’t pursuing an advanced degree, engage in personal and career development so that you remain competitive and marketable.

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