The Personal Finance Podcast - 5 Realistic Money Goals By Age!

Starting point is 00:00:00 Local news is in decline across Canada, and this is bad news for all of us. With less local news, noise, rumors, and misinformation fill the void, and it gets harder to separate truth from fiction. That's why CBC News is putting more journalists in more places across Canada, reporting on the ground from where you live, telling the stories that matter to all of us, because local news is big news. Choose news, not noise.

Starting point is 00:00:27 CBC News. Okay, when I sell my business, I want the best tax and investment advice. I want to help my kids, and I want to give back to the community. Ooh, then it's the vacation of a lifetime. I wonder if my head of office has a forever setting. An IG Private Wealth advisor creates the clarity you need with plans that harmonize your business, your family, and your dreams. Get financial advice that puts you at the center.

Starting point is 00:00:56 Find your advisor at IG Private Wealth.com. On this episode of the personal finance podcast, we're going to be talking about five realistic money goals by age. Up everybody and welcome to the personal finance podcast. I'm your host, Andrew founder of mastermoney.com. And today on the personal finance podcast, we're going to be talking about five realistic money goals by age. If you guys have any questions, make sure you hit us up on Instagram or TikTok app MasterMoney Co. and follow us on Spotify, Apple Podcasts, or whatever podcast player, you love listening to this podcast to.

Starting point is 00:01:51 And if you want to help out the show, leave a five-star rating and review on Apple Podcasts. I cannot thank you guys enough for leaving those five-star ratings and reviews. It truly helps us spread this message that anybody can build wealth. So today on the podcast, we're going to be talking about one of my favorite topics, realistic money goals by age. And this is something that I want to talk through by age. because you're trying to figure out, hey, what is the next thing I need to be doing?

Starting point is 00:02:18 What should I be accomplishing each decade so that I ensure that I'm on track with my money over time? So this is the time to do some of these realistic money goals, and we are so incredibly excited to share some of these with you. So why do we do these by age episodes? The reason why we do these by age episodes is I think separating your financial life into segments or into seasons or chapters, whatever you want to call them, truly helps us think through and compartmentalize how we can start. to build wealth because you don't want to try to do everything all at once. That's why we created

Starting point is 00:02:48 the stairway to wealth to give you the exact order to allocate your dollars so that you can figure out where your money needs to go. In an index fund pro, for example, we talk through the exact order you need to invest your dollars looking at retirement accounts for most situations. So this is the thing to think through is as I go through life, what do I need to be accomplishing? What do I need to be doing? That is what this episode is all about. So if that's something you're into, let's get into it. All right, so the first one we're going to be talking about is your 20s. And the first one in your 20s is to build up your human capital. I think this is the most important thing that you can do in your 20s is to build up your skills, build up your knowledge and do as many things as possible for your personal development. Why is this so important to do early on? Because doing these things and allocating your time and your dollars towards yourself and your personal development is going to allow you to make that much more money over time. What do I mean by that? You're going to be be able to increase your income with new skills. The reason why that is so important is increasing your income is the catapult to building wealth. It is the way that you can actually accelerate

Starting point is 00:03:55 your path to wealth by having extra dollars because as your income increases, you can take those extra dollars and you can invest those dollars. And as those dollars start to snowball, what's happening here is all of a sudden one day you don't have to work another day in your life because you're investing those extra dollars. And as you do this, it makes your life so much. much easier because you have more money to allocate towards your emergency fund. You have more money to allocate towards the things you want in life. Maybe you want to travel more in life. So you can put more dollars towards your traveling.

Starting point is 00:04:24 This is what wealth does. And allowing yourself to earn more money is something everybody should be focusing on, especially in your 20s. And the way to do that, the way to earn more money is to build up your skill set, especially when you're young. Now, one thing I want to note here, if you're in your 30s or your 40s and you're listening to this episode, and you haven't done the stuff in your 20s,

Starting point is 00:04:46 do the stuff in your 20s first. Work through some of that stuff first so that you can build that financial baseline and then work on the 30s and 40s as you progress. Everyone is at a different stage in life as they get to the point where they actually realize, okay, I need to start building wealth. They want to become a wealth builder?

Starting point is 00:05:00 Well, that's the time where you can look at some of these other decades and say, hey, what are the decades before me need to be doing? And I'm going to start doing those things first. So building that human capital, what do I mean by this? What are some of the things that you can do? The first thing you can do is invest your time

Starting point is 00:05:14 into things to learn ways to increase your income. So one way to do that is if you have a specific career path that you know you're going to stay in, then maybe you invest into certifications within that career path. Or maybe you invest in additional education that's going to increase your income. Or maybe you add some skills. You invest in courses or you invest in books that you can learn over time so you can increase your skills, some amazing skills to look at. Or sales, for example. Sales is the number one skill to have if you want to increase your income. because every single industry you need to sell something. And maybe you don't know you have to sell something,

Starting point is 00:05:49 but maybe you're selling your boss on why you need to get promoted and make more money. Maybe you're selling a client on why they need to come on board so that you can earn more revenue for your business. Maybe you're selling to a boardroom on why they need to be investing in certain companies. There's so many different ways that you need to be selling in every industry that it's incredibly important that you do this. Another way to build your human capital though is to get more experience in life, so maybe traveling or additional life experiences, or maybe saving enough money so that you

Starting point is 00:06:18 can work under someone who you truly admire, and maybe you're not making as much money, but you're learning so much more. There's so many ways to invest in yourself. That's what you really need to be doing first. The easiest and cheapest way to invest yourself is buying and reading books. Books are $10 to $20 each book, and you can learn an incredible amount in books. This is the way I really started was I read a book every single week, and by doing that I learned so much more about building wealth, about how to do certain things. I built up so many additional skills just by reading books. Investing in courses is an amazing way to do that. There's so many amazing online courses and the reason why I invest in courses now is because if I want to figure out something

Starting point is 00:06:57 and I want to figure it out quickly, I don't want to flip through 25 different books. What I want to do is take the course that walks me step by step through those steps so that I can move on with my life and get my time back. So that is a reason to invest in course. You could do coaching. So investing in a personal coach that's going to walk you through some of the steps. Maybe you you want to increase your fitness level, so you hire a fitness coach. Maybe you want to take your business to the next level. So you hire a business coach. There's so many different things that you could be doing. So making sure that you do this in the right way is incredibly powerful. The second goal in your 20s is managing your debt and having a debt paydown plan if you

Starting point is 00:07:32 have debt at all. So making sure that you do not add debt in your 20s is really important unless it's low interest debt, something like your mortgage we are okay with here at the personal finance podcast, but adding additional debt for no reason is something you definitely don't want to do. And if it's high interest debt, meaning any debt above 6% interest rate, you definitely don't want to be adding that in your 20s because you're going to be working for a very long time to pay that debt off. So not adding any debt and having a debt payoff plan, maybe you have student loans, maybe you have car loans, all of these things, putting together a debt payoff plan is incredibly important to do in your 20s. The next thing is to put together a automatic retirement savings

Starting point is 00:08:08 plan. So what do I mean by this? What I mean by this is you want to start saving for retirement and you want to start investing those dollars. So the first place to look is if your company has a 401k plan, then making sure you get that 401k match so that you can invest those dollars automatically into that account. The next thing you want to look at is should I go into a 401k or should I go into something like a Roth 401k or a Roth IRA? We prefer the Roth first here at the personal finance podcast, but there's a number of options on why you want to go to an IRA if you're a really, really high earner. So there's a couple of things to think through there, but I like the Roth for a number of reasons. Obviously, your money grows tax-free and you could pull the money out

Starting point is 00:08:46 tax-free. But in addition, you don't have to worry about future tax rates if you put your money in a Roth, in comparison if you put it in just a standard 401K. Now, there's Roth 401Ks that a lot of companies offer now, and that would be my first option. And the second one would be the Roth IRA would be my second favorite option. So if you haven't heard the stairway to wealth, we kind of talk through some of this stuff. So check out that episode if you're new to the podcast. The next goal is to get your first credit cards. We usually have our favorite credit cards linked down below in the show notes. But getting your first credit card allows you to start building up a credit line. Now, a lot of financial gurus out there will say credit cards are the enemy. And they are if you've

Starting point is 00:09:23 had a history with bad credit card debt. Maybe you've picked up credit card debt in the past. Well, you do not want to be doing this step if you've been in credit card debt before. Instead, I would rather you be paying for cash than utilizing that credit card. credit card. But there are a few reasons why you want to get a credit card. The first one is you want to have some credit history in place. If you don't have any credit history in place, it's very difficult to build up a credit score. And your credit history is a major factor when it comes to building up a credit score. The second thing is, is it allows you to collect points and miles. And points and miles are going to allow you to either get cash back on things,

Starting point is 00:09:55 or you can use them for free travel. We have an episode talking about travel hacking. If you haven't heard that episode, it is one of my favorite things to do with credit card points. And there's a bunch of amazing credit cards out there. The way to look at this is how do I spend my money every single month and how do I want to use those points in miles? Because when you're choosing a credit card, you want to look for 1A. Do I want cash back so I can spend it on things that I like? Or am I interested in traveling the world?

Starting point is 00:10:20 What is the reason for me collecting these points in miles? The second thing to look at is, am I brand new to credit cards? Will I even qualify to open a flexible credit card? Or do I need to get something like a secured credit card, which basically is like a debit card that helps you build credit. is essentially the easiest way to think of it. And the third consideration is where do I spend my money? Do I spend a lot of money on restaurants?

Starting point is 00:10:39 Do I spend a lot of money on groceries? Because each card has its additional benefits based on cash back. Do I spend a lot of money on travel? Am I traveling? Do I need a business card? All of these different things. Some of my favorite cards are linked up in our favorite credit card link down below. So you can check those out and see which one may work best for you.

Starting point is 00:10:57 If you're interested in travel hacking, my two favorite starter cards are the Chase Sapphire and the Capital One Venture. Those are two of my favorite. cards out there that you can go and get. And then goal number five is to get comfortable with investing. If you are just getting started investing, you've never invested before, getting comfortable with investing in your 20s is the most powerful thing that you can do. You want to invest your dollars as early as possible because time is actually even more

Starting point is 00:11:21 important than your rate of return. The longer your time horizon of when you started to invest, it actually comes out so much more important than somebody who starts investing later and has a higher rate of return. So say, for example, someone starts at 22 and they start investing $400 a month at an 8% rate of return and someone starts at $32 and they start investing $400 at a 15% rate of return, the person who started at $22 will still come out ahead. And in fact, you can invest less dollars than the person who is investing at 32 and you could still come out ahead. So it is so incredibly important and it's so much easier on your life if you start investing as early as you possibly can. I cannot stress this enough if you're in your 20s. Now, let's jump in to the 30s.

Starting point is 00:12:04 All right, so the goals in your 30s are going to shift a little bit. And the first one is to get your savings rate up. And preferably, we like to have your savings rate at 25% or above once you get into your 30s. Now, in your 20s, you can get away with 15 to 20%, but you want to get that savings rate as high as possible when you hit your 30s. The reason for this is if it's too much lower, then you're going to be working for a much longer period of time than if you increase that savings rate. Now, a lot of people in their 30s, they increase their lifestyle, and their lifestyle inflates because maybe they're having kids. They want to buy the new fancy car. They have a midlife crisis.

Starting point is 00:12:39 I don't know what the situation is, but there are a lot of reasons why your lifestyle would inflate. So making sure you can try to maintain that lifestyle, but increase your savings rate is the way that you can get to that point. If you're struggling to save more money, increase your savings rate by 1% every month or every other month until you get to the point that you need to get to. That is a way to slowly get there without having to stay. stress as much as it would be if you just rip the band-aid off right away. Goal number two is to get a credit score 700 or above. 700 or above is going to allow you to have a lot more options and decrease your interest rate when you're buying a house or when you're buying a car.

Starting point is 00:13:15 And preferably we'd like you to get above 750, but at least getting above 700 so that you can get to the point where you're going to save yourself hundreds of thousands of dollars on interest as you progress throughout life. Now, how do you do this? There's a number of ways to do this. One is to make sure you have that credit history in place and you've started having that credit history in place. But some of the big ones are making sure you have your credit history and your credit history

Starting point is 00:13:37 is okay. So making payments on time, having a long credit history are two very big ones. Another one is to make sure that your credit utilization is low. Meaning, if you have a credit limit, say, for example, across all of your credit cards, that's $10,000 and you're using $2,000 every single month, your credit utilization is at 20%. So people with really high credit scores keep their credit utilization at 10% or below, and people with credit scores above 800 typically keep them below 7% on their credit utilization. That is a major factor in your credit score that a lot of people don't understand.

Starting point is 00:14:10 So increasing the amount of credit available to you and lowering the amount of credit that you're utilizing is going to be a very important thing as you're starting to build credit. Then once you have multiple credit lines, then your credit utilization should start going down naturally. goal number three is you need to have a will in place. Having a will in place is one of the most important things that you can do. So my favorite place to open a will is that trust in will, and we've talked about this in the past as well. We've had an episode on this.

Starting point is 00:14:38 We'll link it up in the show notes below so that you can check that out. But making sure you have a will in place, I think everybody over the age of 18 should have a will in place because it just helps you get your finances in Oregon. It's not a very expensive thing. If you do it online, it's a couple hundred bucks. You have a will in place in everything, including your investments, goes to the correct person.

Starting point is 00:14:57 Now, every belonging you have, if you have children, you definitely need to have a will in place. Everything in life is going to go to the correct person. Now, when it comes to your investments, you need to make sure that you assign your beneficiaries because that is the true indicator of where those investments are going to go, but everything else needs to fall underneath your will. And for a couple hundred bucks, this is worth your time.

Starting point is 00:15:16 Trust and will walks you through the process really easily, and I love how easy they make it. Now, should you have a trust or a will? Well, if your net worth is above a million dollars, then you can start to consider a trust. But if it's not above a million dollars, a will is perfectly fine. And even if you have a trust, you're going to want to have a will within that trust in place anyway. So starting off with the will is the best place for estate planning. In addition to this estate planning, you want to have life insurance in place if you have dependence.

Starting point is 00:15:42 And just simple term life insurance is the best route to go. I got mine at Policy Genius. And they are fantastic. They make the process incredibly easy. and all you do is answer some simple questions, and you can get life insurance. Now, term life insurance is my favorite because it is much cheaper

Starting point is 00:15:57 than other forms of life insurance. Now, one question you may have, and you may be seeing this all over social media, is, is life insurance an investment? My quick answer to that is, no, it's not an investment. You have to have a very specific advisor in place who knows exactly what they're doing

Starting point is 00:16:10 to even consider that. For 99.99999% of people, it is not an investment. So you're going to see people all over TikTok or Instagram saying it is an investment. it's absolutely not the case. Goal number four is a fully funded emergency fund. Do you want to have that fully funded emergency fund in your 30s with six months expenses?

Starting point is 00:16:30 The reason for this is because it protects you against life. Something is going to happen in life. You need to have that emergency fund in place. And as you're going to see is when we hit our 40s and 50s, we're going to be wanting to grow that emergency fund as well because as you approach retirement age, you want that emergency fund to get larger so that you have more protection as you need to live off your portfolio or your other.

Starting point is 00:16:49 investments. And then goal number five is your income should be growing steadily. Now, if you're making a career change in your 30s, I understand maybe you have to make that leap and reduce your income. But for most people, you want to start to see your income increase steadily. And if it's not increasing, you've got to think through why is that happening? Because you need that income to increase so you invest those extra dollars so that you can retire that much faster. And if you're interested in financial independence, you want to really accelerate that savings rate so that you can get there either by the end of your 30s or your early 40s. A lot of people who are really aggressive in their 20s can retire in their 30s,

Starting point is 00:17:23 mid 30s, late 30s, and this is a great path to take, but that's not for everybody. And if you're trying to retire in your late 40s or 50s, then that's something you can very well do as well, but you need to have that increased income so those extra dollars can fuel that fire. So look for ways to increase your income at your day job first, side hustle second, or maybe even starting a side business. Now, let's jump into the 40s. So lately, I've been noticing how fast things are changing at home.

Starting point is 00:17:51 The kids are growing like crazy, clothes don't fit anymore, and routines are changing. And it just hits you. Life is expanding. And when your life grows, your responsibility grows with it. That's something I've been thinking about more this spring, making sure the safety net we have in place actually matches the life that we're building. And that's where PolicyGenius comes in. PolicyGenius is an insurance company. They're an online marketplace that helps you compare life insurance quotes from some of

Starting point is 00:18:16 top insurers in America, all in one place for free. And their licensed team works for you, not the insurance companies. So they help you find the right coverage for your situation, without all the guesswork. And they walk you through everything. Answer your questions, handle the paperwork, and help you get the coverage that actually fits your life today and where it's going. So protect your family with a policy that grows with your life. With policy genius, you can see if you can find 20-year life insurance policies starting at just $276 a year for $1 million of coverage. Head to PolicyGenius.com to compare life insurance quotes from top companies and see how much

Starting point is 00:18:53 you can save. That's PolicyGenius.com. I remember when I needed to hire someone fast, but finding the right person quickly felt impossible. And if you've ever been there, you know how stressful this can be. That's where Indeed comes in. When it comes to hiring, Indeed is all you need. Instead of struggling to get your job post noticed, Indeed's sponsor jobs help you stand

Starting point is 00:19:13 out and hire faster. Your post jumps up to the top of the page, making sure it reaches the right candidates. And it makes a huge difference. Sponsored jobs on Indeed get 45% more applications than non-sponsored ones. And there's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash personal finance. Just go to Indeed.com slash personal finance right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash personal finance. Terms and conditions apply.

Starting point is 00:19:50 Hiring, Indeed is all you need. Amazon presents Jeff versus Taco Truck Salsa, whether it's Verde, Roja, or the orange one. For Jeff, trying any salsa is like playing Russian roulette with a flamethrower. Luckily, Jeff saved with Amazon and stocked up. on antacids, ginger tea, and milk. Habaniero? More like habanier, yes. Save the everyday with Amazon.

Starting point is 00:20:24 This episode is brought to you by Tellus Online Security. Oh, tax season is the worst. You mean hack season? Sorry, what? Yeah, cybercriminals love tax forms. But I've got Tellus Online Security. It helps protect against identity theft and financial fraud so I can stress less during tax season, or any season.

Starting point is 00:20:44 Plan started just $12 a month. Learn more at talus.com slash online security. No one can prevent all cybercrime or identity theft. Conditions apply. All right, so your 40s are a time where there's going to be a lot of progress happening. Maybe some of you are retiring or maybe some of you are getting at the point where you're getting ready to retire. But in addition in your 40s, this is where you can accelerate your path to wealth as well. The first goal is to set up a dream fund because you can do this during any decade.

Starting point is 00:21:11 and I would advise people to do this during any decade. But the first thing you want to do is just set up a dream fund because as you start to age, you want to make sure that you're allocating as many dollars as possible to enjoying life. What do you dream of doing? Ask yourself some of these questions. Do you dream of traveling across the world?

Starting point is 00:21:26 Do you dream of going to every football stadium in the country? Do you dream of opening a little ice cream shop on the beach? What do you want to do with your life and open a fund where you can start saving dollars towards that dream? This is one thing that a lot of people don't talk about and you need to be doing this because your dollars are there and they are there to allocate towards your happiness, towards your joy, in addition,

Starting point is 00:21:48 they're there to reduce your stress and anxiety with things like an emergency fund. So there's multiple things that your dollars are there for, but all of them should be positive. It should not be a point where your money is something that is a source of negativity. So the way to do this is to start saving your dollars in different categories.

Starting point is 00:22:04 And the Dream Fund is a major way to put it towards your joy, to put it towards things that you actually value. So one big thing for me is traveling as much as possible. So putting dollars in my dream fund towards traveling is going to be something I definitely want to do. I want to take my two sons around the world. I want them to see the world. So this is something where we're definitely allocating as many dollars while they're young so that as they progress and as they get older,

Starting point is 00:22:27 we can take them around the world at the time that they remember it. So there's so many different things that you want to think through with this dream fund, but ask yourself the questions of what brings you joy, what brings you happiness, and how can you allocate dollars towards that? Number two is you want to boost your retirement funds. So boosting up your retirement funds, making sure you're allocating extra dollars towards retirement because as you progress towards retirement age, you want to have that extra money in place.

Starting point is 00:22:52 So increasing your contributions to your 401K or your Roth 401k or your 403B, whatever you have with your employer. In addition, increasing your IRA contributions, your Roth IRA contributions, your HSA contributions, there's so many different things that you can be allocating your dollars to. but making sure you're boosting those as well. And that perfectly aligns with goal number three, which is to max out your HSA. So your HSA, if you don't know about this, it's a super retirement account.

Starting point is 00:23:20 You can do this with any decade. We recommend doing it as early as possible. But in your 40s, definitely make sure that you're trying to max out this HSA. Why? Because it has triple tax benefits. What do I mean by that? Money goes in tax-free.

Starting point is 00:23:33 You can invest those dollars and those dollars can grow tax-free and you can pull the money out. tax-free as long as you have a qualified medical expense. But the IRS states that there is no timeline to how old that medical expense has to be. So you can have a medical expense from when you were age 18 and pull money out that's qualified when you're 65 and that works fine. So an HSA is actually stands for a health savings account. And what you do is you put dollars into the HSA and you can invest those dollars that grow. And then you save your receipts. We save them

Starting point is 00:24:06 Dropbox or Google Drive, whatever platform you like to use. And then you can utilize that as backup when you pull money out for qualified medical expenses later on in life. So an HSA is a really powerful account. We absolutely love it. And if you haven't heard the stairway to wealth, we talk about it in there as well. But we have an entire episode on the HSA called the Super Retirement Account. We talked through all the details on that in that episode.

Starting point is 00:24:30 Goal four is if you have a mortgage, make a plan to when you want to pay off that mortgage. Do you want to have it paid off prior to retirement? That's what I would prefer, is to have it paid off prior to retirement. Or are you going to carry that mortgage into retirement? Because if you pay it off before retirement, that significantly reduces your expenses so that you don't have those expenses that you have to save up for as you're starting to prepare for financial independence and retirement. So think through your plan.

Starting point is 00:24:59 Do you want to pay off your mortgage or do you want to keep that mortgage within your budget because you'd rather save those dollars and invest those dollars? Kind of think through that. but my preference would be to pay it off because A, gives you an additional safety net. B, you have those extra dollars in retirement that you don't have to save up for. Now, if you are behind on retirement savings, and I would personally much rather invest those dollars because you get a higher rate of return typically when you invest those dollars, but just making sure you have that plan in place and thinking through that is incredibly powerful.

Starting point is 00:25:24 And then goal number five is to start to get towards a one-year emergency fund in place. Now, some people may disagree with this. The reason for this, though, is that you're approaching towards retirement age. And as you get to retirement age, you want to make this easier for yourself. Because when you live on your portfolio, there may be really bad down years. And in those really bad down years, I would much prefer to have some cash on hand, maybe one, two, three years of cash on hand that I can live on so that when the market is really, really low, I don't have to pull from the market at its lowest prices.

Starting point is 00:25:53 So this is just an extra safety net. You don't have to do this, but this is what I do and this is what I progress towards, is having more cash on hand. Now, sure, that cash goes down in value over time. I completely agree with that because cash is something you really want to get out of your accounts and be investing and getting those dollars to work. But as I progress in age, cash is security. Cash is the thing when you have cash on hand, it is the one thing that can be security for you. So having that security net in place is incredibly powerful, but then getting the rest of your money out of your savings account, unless you're saving for a short-term savings goal or an emergency fund is something you definitely want to do and get it into investments.

Starting point is 00:26:30 You should have as many dollars as possible working for you, but having this additional cash as you get closer retirement age is just an extra safety net that you can have. Now, let's get into the 50s. All right, so we are in the 50s now. And within the 50s, there's a lot of things that are happening as you get to your 50s, but you have some extra benefits when it comes to retirement accounts.

Starting point is 00:26:51 And in addition, you are able to get to the point where you're getting much closer retirement age and where you can start drawing down on Social Security and all those other things. Now, should you rely on Social Social Security, if you're in the U.S. I would use it as an extra bonus or some whipped cream on top because as you get closer to that age, we don't know if Social Security is going to be around in the future.

Starting point is 00:27:11 People have said that for decades and decades and it's still around at the time of recording this. But it's just an extra benefit that you can have. But taking care of your own retirement and not having to rely on the government is the best possible plan. And then having that extra income coming into play is something that you definitely want to be doing there in the future. So the first one is goal number one.

Starting point is 00:27:30 you should be taking advantage of catch-up contributions. What is a catch-up contribution? So when you invest in your 401K or your IRA and you're over the age of 50, you have what are called catch-up contributions that are available to you. And you should be taking advantage of these. It's an additional amount of money that the IRS allows folks over the age of 50 to invest their dollars into these requirement accounts so that they can catch up for retirement. So you have this decade to be able to use it to,

Starting point is 00:28:00 put extra dollars in those catch-up contributions. So making sure you're taking advantage of those just allows more dollars to get into those accounts and you can take those tax advantages. In addition, that money is going to be compounding. Goal number two is you want to reassess your asset allocation. What is asset allocation? It means how much stocks, bonds, all of those things that you have. Reassessing your asset allocation means what is my risk tolerance now that I'm at this age and what do I need to adjust so that I'm comfortable with my portfolio? A lot of people as they get closer to retirement age, they adjust their portfolio to have more bond exposure than as much stock exposure. For me, right now, at the time recording this, I'm more interested

Starting point is 00:28:40 in having more stock exposure just because I understand how the market works. But if you want your portfolio to be less volatile, meaning going up and down less, then more bond exposure historically has allowed that to happen. So thinking through what your asset allocation is and would you like to have more bonds on hand or would you rather have more stocks in your portfolio over the long term is how you want to think through this. So your risk tolerance is the biggest factor that comes to play. Goal number three is to have more cash on hand so that when you hit retirement age, you have that cash in play.

Starting point is 00:29:10 I like at least two years or more, but some people are going to disagree with me on this again. But having this cash in play, like we said in the 40s, is your extra safety net. It allows you to make sure that you don't ever have to go back to work again if something happens in the market or if you have any other issues. So having this two years of cash in play just allows you to have an extra safety net through retirement and just going to make you more comfortable. It's going to make you at ease mentally and it's going to reduce that stress in retirement. Too many retirees don't have any cash on hand and they get really, really stressed out.

Starting point is 00:29:44 So making sure you have that cash on hand is something I definitely would consider. Goal number four is to look at long-term care and health care. So thinking through in your 50s, what am I going to do as I age if I can't take it? care of myself is what long-term care is. Now there's insurance out there that you can get. It's very expensive and very complicated or you can think through, am I going to live with my children or what am I going to do? In addition, your health care costs will rise. So think it through how you're going to look at your health care costs. Are you going to be on Medicare? What are you going to be doing in the future? So thinking through all that stuff is very, very important. And goal number five is your

Starting point is 00:30:20 estate plan should be bulletproof at this point. Everything should be in place. Your will. If you have a trust, your trust should be in place, your life insurance, all of these different things. Everything should be allocated towards the correct beneficiaries. If it's not, you need to think through this stuff as well. Maybe if you're confused about it, you don't know how to do it, you can talk to an attorney. If you want to look at trust and will, trust and will is a fantastic place where they just walk you right through it. The costs are much cheaper. But if you want to make sure that everything is explained to you step by step, then you can also do it with an attorney. And just know, the costs are just going to be higher, but there's nothing wrong with hiring

Starting point is 00:30:54 attorney. Attorneys are fantastic for these types of things. So these are the five realistic money goals for every single decade. If you guys have any questions, make sure you hit us up on Instagram or TikTok. We hope you learned a ton in this episode. And we truly appreciate each and every single one of you listening to this podcast. And thank you to everyone leaving those five-star rating and reviews. If you got value out of this episode, send it to a family member or friend. Thank you guys again for listening to this podcast episode. We will see you on the next episode. Frozen lasagna, medium power, 15 minutes. Sounds like Ojo time.

Starting point is 00:31:43 Let's play. Feel the fun with Play Ojo. The online casino with all the latest slot and live casino games. What you win is yours to keep with no wagering requirements. Instant payouts and no minimum withdraws. Hey, I just won. Woohoo. Feel the fun.

Starting point is 00:31:58 Play Ojo. Honey, forget about the lasagna. Let's celebrate. 19 plus Ontario only. Please play responsibly. Concern about your gambling or that of someone close to you. Call 1866-531-2600 or visit conexontario.ca.

The Personal Finance Podcast - 5 Realistic Money Goals By Age!

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.