A Financial Checkup for Your 30s and 40s

Good financial health is all about recognizing the most important issues during each stage of your life.

If you're in your 30s or 40s, you may find life a balancing act. You may not be able to save as much as you want for retirement and a child’s college expenses, or buy as much life insurance as you’d like.

But as long as you keep some balance and don’t sacrifice one goal for another—such as saving for college at the expense of funding your retirement—your plans should stay on track.

Maximize your UC 403(b) or 457(b) and minimize debt

It’s important to make the most of your UC 403(b) or 457(b) during your 30s and 40s. Consider working with a Fidelity Retirement Planner to understand how much you may need to save.

And if you’ve got high-interest credit card debt, consider paying off your credit card balances. Instead of paying high interest rates to credit card companies, put the money towards your retirement or other goals. Paying off your credit card balances frees up extra cash to devote to your savings.

Save for college

If you have children, now is a good time either to get started on saving for college or to ramp up your efforts. One option: a 529 plan like California’s ScholarShare. The contribution limits are high, there are no income restrictions, and your savings grow tax deferred. Better still, you won’t pay federal income taxes on your withdrawals as long as you spend it on qualified higher education expenses.

Purchase protection

Make sure you have adequate disability insurance and life insurance.

Disability insurance will help you replace lost income before retirement if you should become disabled.

Life insurance may help you replace lost income, transfer wealth, eliminate debt, complete a college savings plan, or address other financial goals, should you pass away unexpectedly.

Term life insurance, which you buy for a certain number of years but in which you don’t build equity, is much less expensive than permanent insurance, which stays in place until death and builds up a cash value.


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