It’s helpful to have long-term financial goals at which to aim. But the problem is that there is just SO MUCH financial advice to be had on ye olde World Wide Web that cutting through the noise and finding simple targets is difficult.

So, that’s what I’m here to provide today.

For those of my clients who are over age 50, this can be a guide to catching up … or, well, it might be the perfect thing to send along to a friend of yours who is in their 40s who might be interested in a great tax professional from Louisville. 😉 [Referrals really are the lifeblood of our practice.]

And as the nation’s eyes are on the Northern California fires, let’s not forget that no matter where you might find yourself on the financial scale, there are ALWAYS things for which to be thankful. Recognizing this fact is the first step towards financial well-being, no matter your age.

Kevin Roberts’ Five Key Long-Term Financial Goals
“Change might not be fast and it isn’t always easy. But with time and effort, almost any habit can be reshaped.” – Charles Duhigg

Finances should be viewed as dispassionately as possible, don’t you think?

Unfortunately, too many financial planners have their advice clouded by various financial incentives, and they often don’t take a holistic view of every part of the financial picture.

As a tax professional in Louisville, I get unique insight into financial health because I see so many tax returns … and because I am not burdened with as many competing incentives.

So, that being the case, allow me to establish some landmarks for you on our map towards financial independence. It’s great to know where you should be headed … or, from what place you should be coming.

Here are five real-world financial targets to shoot for by age 50:

1) Your estate plan should be fully in place.

Of course, various assets are handled differently. This is the time to make a complete review of how your plan is put together, to ensure that EVERY asset (not just the tangible ones) are still handled properly.

Intangible assets can include such things as what you are passing down to your children in terms of “family ways” and values that you would like to see spreading down throughout your generations. This is an important step at midlife.

2) If college is paid for, consider dropping term insurance. 

At this stage of life, it becomes more costly to pay for this service. You are probably at the point where your children are nearing the completion of their education.

Remember that you purchased “peace of mind” (term insurance is not an investment) so that if anything were to happen to you, your home and your children’s education could be paid for. If those things are now moot, it may be time to reassess.

3) Evaluate where you are with your saving and investing.

You may not want to retire for quite some time yet. That’s a wonderful place to be. But you should be considering whether you have saved up enough to match your desired lifestyle spending. It’s a good rule of thumb that you should have saved about 8-10 times your annual lifestyle spending at this point.

If you haven’t?

4) Catch up on your savings.

At age 50, the maximum savings limit in a 401(k) or 403(b) account increases from $18,500 (which is the 2018 limit under age 50) to $24,500 (it was $500 less for each amount in 2017). At age 50 or older, Roth contributions also increase from $5,500 a year to $6,500 with these “catch-up” provisions. If we don’t have eight times our lifestyle spending saved, now is the time to press these limits.

Of course, saving well is half the battle; investing well is the other half.

That’s a subject for another day.

5) Lastly, begin considering what you really want out of retirement.

Consider that living a life of purpose doesn’t necessarily mean decades of simple recreation.

Reaching the place where you don’t “have” to work is a wonderful marker of true financial success. But you can make the decision to view your retirement years as an opportunity to do new, meaningful work. Commit yourself to a nonprofit or a ministry endeavor. Find ways to strategically invest your time and energy into different work that matters (aside from your first-half career).

Although you can have that attitude at any age, it is especially powerful when redefining the second half of your life.

I do hope this helps … and no matter where you find yourself, there is “no shame in our game”, and we are in your corner.

Until next week,

Kevin Roberts
(502) 426-0000
Roberts CPA Group