David Lerner Associates: Financial Planning in Midlife

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(Newswire.net — October 30, 2014) Syosset, NEW YORK — The 40s are generally considered to be the beginning of middle age. This is a transitional life stage for many people as they advance in their careers and watch their kids grow up, perhaps even sending them off to college in their mid to late 40s.

“It is also a critical life stage when it comes to setting yourself up financially for the second half of your life,” says John Dempsey, president of David Lerner Associates. “The moves you make in your 40s can have a big impact, either positive or negative, on your finances in your 50s, 60s and on into retirement.”

One of the best ways to make sure you head into your 40s with strong momentum and in good fiscal shape is to set some pre-40 financial goals. Here are 5 goals to consider trying to reach before you hit the big 4-0:

1. Eliminating debt. Being debt free (except for your home mortgage) by age 40 is one of the most financially freeing things anyone can accomplish. “Large amounts of consumer debt, especially high-interest credit card debt, can be like an albatross around the neck of someone entering their 40s,” says Dempsey. “It can severely restrict your financial flexibility and your ability to stash away large amounts of money for retirement while you’re in your 40s.”

2. Creating a “rainy day” emergency savings fund. Along with paying off debt, this should be another top financial priority for many people before they reach 40. “The idea behind creating an emergency savings fund is to have money set aside to cover unexpected expenses that may pop up,” says Dempsey.

Many financial experts recommend accumulating between 9 and 12 months’ worth of expenses in a low-risk liquid account (like a bank savings or money market account) to cover things like major home or car repairs, medical bills or a job loss. “When you have money set aside in an emergency account for these kinds of expenses, you may not have to pay for them with a credit card and possibly incur high interest charges,” says Dempsey.

3. Cleaning up your credit. Poor credit can be another financial albatross as you enter your 40s. It can result in having to pay higher interest rates on all kinds of consumer loans, including car loans and a home mortgage. Dempsey suggests checking your credit report at least annually — you can obtain a free copy of your credit report once a year by visiting annualcreditreport.com.

4. Buying a home. There’s a reason this is often called the American dream: Home ownership often results in more lifestyle and financial stability for couples and families. “Not only is owning a home a wise financial move in the right circumstances, but also it can provide a solid financial foundation and valuable tax breaks,” says Dempsey.

He stresses that home ownership isn’t the right choice for everyone, especially those who move often or who don’t have enough money to make a good down payment. “Putting down at least 20 percent of the home’s purchase price is often ideal. A higher down payment generally results in lower monthly payments and faster accumulation of equity.”

5. Learning about investing. The world of investing can be a little intimidating if you’re not familiar with it, but you shouldn’t let that stop you from getting your feet wet. “Having at least a basic understanding of investing is often critical to achieving longer-term financial goals like paying for college or ensuring a financially secure retirement,” says Dempsey.

He adds that there is plenty of information available online to help you learn the essential investing basics or you can take a basic investing or personal financial planning course at a local community college.

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities. Member FINRA & SIPC


About David Lerner Associates

Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates http://www.davidlerner.com (800) 367-3000

David Lerner Associates

477 Jericho Turnpike
Syosset, NEW YORK United States 11791-9006

(516) 921-4200