Author: Dan Rafter / Source: Wise Bread
Your 40s can be a stressful time. Your children might be moving on to college, changing the dynamics of your household. Your own parents are aging and might need to move into a nursing home or assisted living facility. And you might be feeling extra pressure at work to move up to higher-paying positions as a way to maximize your earning potential.
But your 40s can also be a time to secure your financial health and pave the way toward a brighter retirement. You can increase your odds of achieving this goal by following the personal finance rules below.
1. Focus on building your retirement savings
The main goal in your 40s should be to boost your retirement savings as much as possible. Retirement might still seem a long way away, but it’s closer than you think.
If you are saving money in your company’s 401(k) plan, be sure to maximize your regular contributions and take advantage of any company match. Do the same with any investments you make in a traditional IRA or Roth IRA. The more you save today, the brighter your retirement years will be. (See also: 7 Retirement Planning Steps Late Starters Must Make)
2. Don’t let college costs derail your retirement savings
You want to help your kids pay for their college educations. That’s understandable, but don’t let your desire to help your children derail your retirement savings.
If you spend too much money helping your kids pay for college, you’ll struggle to build your retirement savings. In your 40s, saving for retirement should be your top priority, outweighing even your goals of chipping in to pay for your children’s college education.
Remember, your children have options for paying for college. They can borrow money. They can choose less expensive schools. They can seek out scholarships or attend a community college for two years. You don’t have nearly as many options when it comes to your retirement savings. (See also: How to Keep Student Loans From Wrecking Your Retirement)
3. Reduce your debts
Nothing ruins your plans to save money quicker than debt. And no other is as costly as credit card debt. Do everything you can in your 40s to eliminate it.
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