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How To Invest As You Age

Financial investments should change as you move through the stages of your life.  Consider these strategies to make better use of your hard-earned money.

During your 30s and 40s:  These are years of increasing income and increasing demands for your money, particularly providing for your children.

·         Life insurance is relatively inexpensive at this stage of your life.  Buying a policy also is a way of providing for your family’s future.

·         529 plans offer tax-advantaged savings for your children’s education.  For details, which vary by state, go to www.savingforcollege.com. 

·         Annuities can be a good addition to an IRA or 401k retirement account, and usually have tax-deferred options and guaranteed life income.

During your 50s:  Prepare for a well-funded retirement during these years.

·         Remove all risks from your retirement plan. Think about a retirement date and your ability to meet that date.  Reduce investments in such things as your employer’s company.

·         Take advantage of slowing expenses.  You are at the top of your earning power, and big expenses, like children living at home, are likely reduced.  Consider paying off your mortgage or increasing your investments.

During your 60s and beyond:  This is a time to enjoy the fruits of your labor.

·         Test living on projected income before stopping work.  If your expected retirement income will be 70 percent of your current paycheck, set aside 30 percent now and see what it’s like to live on the rest.

·         Apply for Social Security and Medicare.  Visit these sites to help you make important decisions about these programs: www.socialsecurity.gov and www.medicare.gov.