What does financial flexibility mean to you? It could give you the opportunity to pursue personal goals and milestones while shouldering less of a financial burden.
Our goal is to help each individual pursue financial flexibility, no matter their income level, present outlook or future objectives. But what personal opportunities does it typically unlock, and how do those change as you age and progress through both your life and your career? Well, we define financial flexibility as the ability to chase your goals and dreams, and it can occur if your earnings outpace your expenditures, or if you’ve saved an enough to cover your lifestyle expenses in retirement. Here are a few possibilities that may be availed to you through the pursuit of financial independence and saving ample funds for your desired lifestyle.
20s
In your 20s, financial flexibility might begin with the ability to start paying off those expensive student loans. You can also use this time to grow in the initial stages of your career while collecting paychecks that ideally allow you to pay down high-interest debt, make a down payment on your first home or consider starting your family. Financial flexibility can also allow you to travel, plan for a wedding, move cities to chase career opportunities, or start a side hustle or passion project. Furthermore, remember, saving any amount can have a huge impact on your future financial flexibility because of compound interest.
30s
By your 30s, you might be a bit more settled, either with a family or an estimation of when you’ll begin your family. You may also have a better idea of who you are, your goals, your dreams, your passions and your desired lifestyle. Financial flexibility in this stage can allow you to indulge in those dreams, potentially with grander vacations, elimination of hand-cuffing debt, continued repayment or payoff of your home loan and car, and the ability to provide for your loved ones. You can also consider an estate plan or a life insurance policy to help protect those who might rely on you. This could be a good way of helping both you and your beneficiaries prepare in the event something happens to you.
40s
Once you reach your 40s, you’re likely used to the life you’ve built and the family you’ve raised. You may also be more comfortable financially, as you’re deep into your career and have adapted with the industry you work in. That’s why in this stage, flexibility is about satisfaction. With more security in your profession and better backing in your bank account, you could continue to travel, look for a second home and provide for your beneficiaries. Additionally, with children moving toward college, it can be a good idea to consider saving options for them while still saving time and funds for your aging parents.
50s
Your 50s could be the perfect time to sock money away for retirement and ensure your accounts are well-funded. You may also consider a more conservative approach with your savings to help protect yourself from market volatility. Additionally, it can be a good idea to reassess your estate plan and your life insurance policies, making necessary tweaks to pass your wealth as tax-efficiently as possible. Moreover, if you’ve shored up all aspects of your financial and retirement plans, you may have some flexibility to spend on things like vacations, charities, vow renewals or other recreational expenditures. It can also be a crucial time to consider the possibility of needing long-term care. Roughly 70% of Americans over the age of 65 will need some type of long-term care [1], so while it’s nothing to be ashamed of, it can be a good idea to be prepared.
60s
In your 60s, you may be on the cusp of retirement or already in retirement. That’s why this could be a good time to plan for how you will receive income in retirement. You may also be in a comfortable enough position to begin looking at vacation homes, pursuing your various hobbies, checking off bucket list items or even just enjoying a little bit of downtime. If you have grandchildren on the way, you can begin exploring options that help them save for further education.
70s
Having passed your full retirement age or beyond, you may have the monetary means to match your ample free time. The world is your oyster, and with sufficient retirement funds, you can plan fun things depending on your hobbies and your passions. If you enjoy traveling, it could be a great time to take that once-in-a-lifetime trip, as you no longer have to request time off work. You might also be able to tack onto a collection you’ve been building for decades. Maybe retirement simply means more time to spend with friends and family, and now that your time and your finances are flexible, you can develop those relationships without any inhibiting factors.
80s and Beyond
Though you may slow down a bit during this phase, you don’t have to stop living your life, even if your hobbies change. You may discover that you enjoy less active pastimes, such as attending art or theater shows. You should also continue reviewing your estate plan, helping your heirs prepare should something happen to you. This may also be the time during which a long-term care policy could come in handy should you need it; however, if that’s a level of care and protection you desire, it can be more beneficial to have it in place long before your 80s. Most long-term care claims begin in the policyholder’s 80s [2], so that policy may be able to help you cover that cost in the later stages of retirement.
Financial flexibility may look different for everyone, but universally, it can be the key to unlocking the comfortability to chase your dreams. To see how we can help you design a plan to become financially flexible and work to bring those dreams to life, please visit us online! You can reach Simon & Simon Financial in Covington, Louisiana at 985-900-2510.
This article is not to be construed as financial advice. It is provided for informational purposes only and it should not be relied upon. It is recommended that you check with your financial advisor, tax professional and legal professionals when making any investment or any change to your retirement plan. Your investments, insurance and savings vehicles should match your risk tolerance and be suitable as well as what’s best for your personal financial situation.
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