Financial Roadmap: Milestones for Every Decade

Whether you realize it or not, you are on a lifelong financial journey—but you don’t have to travel alone. With the right financial roadmap and partners, you can enjoy the trip and hit all the milestones along the way. While everyone takes their own route, we share some of the common guideposts by decade below.

Navigating Your 20s with Smart Money Moves

  • Master budgeting and expense tracking. Use apps or spreadsheets to track your income and expenses. Understanding where your money goes each month helps you make informed decisions, prioritize your spending, and start saving more effectively.
  • Pay down student loans and high-interest debt. Target debts with the highest interest rates first. Reducing your debt early on significantly decreases the amount of interest you pay and increases your credit score.
  • Invest early. Even small amounts invested in your 20s can grow significantly due to the power of compound interest. Take advantage of any employer-sponsored retirement plans like a 401(k), especially if it offers a match. Set up automatic contributions to make investing a regular habit.
  • Know your credit score and how to improve it. Your credit score will play a crucial role in your financial life, affecting your ability to rent apartments, buy a home, and secure loans with favorable rates. If you bank with us, make sure to enroll in Credit Score* within online banking to monitor and get tips to improve your credit score. Credit Score is available to our customers who are enrolled in Cornerstone Bank online and mobile banking.

Steering Your 30s Toward Financial Success

  • Grow an emergency fund. Aim to save at least three to six months' worth of living expenses to cover unexpected expenses like medical bills, car repairs, or job loss, without needing to rely on credit cards or loans.
  • Establish SMART financial goals. These might include buying a home, saving for your children’s education, or specific retirement goals. Break these into manageable steps and review them annually to adjust for any changes in your financial situation or goals.
  • Protect your health, wealth, and family with insurance. As your financial responsibilities increase, so does the need to protect your assets and income. Evaluate your need for various types of insurance, including life, disability, health, and property insurance to safeguard against unexpected events.

Mapping Your Financial Future in Your 40s

  • Maximize your retirement savings. As you progress through your financial journey, increasing your retirement contributions should be a priority. If you haven't already, aim to max out your 401(k), especially if your employer offers matching contributions, as this is essentially free money. Consider other retirement accounts, such as an IRA or a Roth IRA, depending on your income and tax situation.
  • Plan for your children’s education. If you have children, explore options like 529 college savings plans, which offer tax advantages and can be a substantial financial help when your children reach college age.
  • Review and adjust your investment portfolio. Your risk tolerance changes as you get closer to retirement, necessitating a shift in your investment strategy. Periodically assess your portfolio's performance and adjust it as necessary to ensure it aligns with your current financial goals and risk tolerance.
  • Work with a financial advisor. If you haven’t already, this is a good time to start working with an experienced financial planner. You still have a decade or two before retirement to ensure your financial stability as you age. A financial planner can help ensure you are on track to reduce debt and increase savings.

Reaching Financial Milestones in Your 50s

  • Prioritize debt elimination. Focus on paying off high-interest debts, such as credit card balances, and then move on to other debts like car loans or your mortgage.
  • Create an estate plan. This may include a will, a living will, healthcare directives, and setting up trusts or other legal structures to manage your assets and ensure your financial legacy is handled according to your wishes.
  • Assess retirement plans. Evaluate how close you are to achieving your financial goals. Review your retirement savings, estimate your future expenses, and adjust your savings rate, contributions to your retirement account, or investment strategies as needed (your financial planner will continue to be helpful for this).
  • Evaluate long-term care options. The likelihood of needing some form of long-term care increases as you age. Long-term care insurance can help cover costs that aren’t included in typical health insurance, such as home care services or nursing home care.

Piloting Your Finances Through Your 60s

  • Create a detailed retirement budget. Include expected and fixed costs like housing and utilities, healthcare expenses—including Medicare premiums and out-of-pocket costs—and variable costs such as travel and leisure activities.
  • Review your retirement income streams. Get a clear picture of your income sources, including Social Security benefits, retirement account withdrawals, pensions, and any other investments. Calculate your total expected income and ensure it aligns with your retirement budget. If there are gaps, consider strategies like delaying Social Security benefits to increase your monthly payout.
  • Regularly reassess your investment strategy. It's generally advisable to shift towards more conservative investments as you age, but every retiree's financial situation and risk tolerance is different. Work with your financial advisor to ensure your strategy continues to meet your needs in terms of both income and capital preservation.

A Guide You Can Trust

No matter where you are on your financial roadmap, having the right guide can make the journey a lot smoother.