Six financial moves to make in your 40’s
August 10, 2017
THE CONTENT IN THE BELOW ARTICLE IS MEANT FOR CANADIAN INVESTORS ONLY
As part of the “sandwich generation,” can you handle the competing demands on your money?
For people in their 40’s, life can be a source of increasing demands, from work responsibilities and managing your kids’ busy schedules, to looking after aging parents, managing expenses and, if there is any time left, taking care of your own health and wellness. It’s easy to feel pulled in a million different directions.
Not surprisingly, addressing financial issues can easily drop to the bottom of the list for the fortysomething crowd. Here are a few simple tips to keep your finances in order:
- Pay down debt. Be it debt from a credit card, car loan and/or line of credit, the sooner you reduce what you owe, the sooner you can save more for retirement or other long-term goals.
- Contribute to your Registered Retirement Savings Plan (RRSP). . In your 40’s, is the decade you may be earning more money and are looking for ways to save for retirement, while minimizing taxes. Contributing as much as you can to an RRSP can achieve both!
- Build your Registered Education Savings Plans (RESPs). While earlier is better, any time you can make contributions to RESPs can benefit your kids. RESPs represent a tax-preferred way to save for post-secondary education and you can benefit from additional government grants.
- Maintain an emergency fund. Building a cash reserve as part of your overall financial budget will allow you to cover expenses like emergency repairs and unplanned-but-crucial purchases, or help maintain financial stability in case of an unexpected job loss.
- Address your parents’ evolving needs. As your parents age, they may need help with estate planning and other areas of financial management (e.g., power of attorney, paying bills). Concerns associated with health, such as medical insurance and mobility-related home renovations, may also surface. These added costs can create a sudden financial strain if you’re not prepared.
- Work with an advisor. Your advisor will help you create a financial plan and build an investment portfolio that can generate the growth required to meet your financial objectives.
Checklist: Things to Do
- Pay down debt
Ensure your RRSP savings are on track
- Maximize RESP contributions
- Review your insurance needs
- Build your emergency fund
- Discuss finances with your parents