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Financial Independence Checklist

Updated: Apr 18



Financial independence looks different depending on your age and stage in life. While becoming a parent can put a wrench in finances at any age, we decided to share with you some basic financial suggestions by age to help you plan better in the long run. Dr. Cathy Duffy, Ed.D., CMA. Cathy, a Financial Planner at Baystate Financial has graciously shared this checklist with us.


Financial Independence Checklist


In your 20’s

Savings/Retirement Planning

  • Open checking and savings accounts if you haven’t already done so.

  • Learn to make a budget and use it.

  • Start an emergency fund aiming to have three to six months’ pay saved in case you run into financial surprises.

  • Sign up for your employer’s 401(K) Plan, if available, and contribute at least the minimum percentage to receive the full match. Or, create an IRA.


Debt Management

  • Limit yourself to one credit card for emergencies and pay the balance each month. If you already have credit debt begin paying off the balances starting with the highest interest rate first.

  • Work on paying down student loan debt.

  • Check your credit report for discrepancies. Now is a good time to obtain a baseline credit score and adjust as necessary.


Protection Planning

  • Lock in low life and disability income insurance rates at an early age to save money later.


In your 30’s

Savings/Retirement Planning

  • Continue contribution to your 401(K) or IRA.

  • Review how your 401(K) or IRA is invested to determine if more aggressive investments are appropriate.


Debt Management

  • If you are buying a home, aim for a 20% down payment to avoid mortgage insurance. Your mortgage payment should be no more than 28% of your monthly income (per lending guidelines).


Protection Planning

  • If you’ve started a family, consider buying life insurance to protect them financially should you die unexpectedly.

  • If you rent, purchase renter’s insurance to cover losses in the event of theft, fire, or other disasters.

  • Work with a lawyer to establish a will and address any other estate planning needs you may have.

  • Make sure you have enough car and homeowner’s insurance. You can often save money by using the same company for both products.


In your 40’s

Savings/Retirement Planning

  • Work with your financial representative to set up specific retirement savings goals

  • Review how your 401(K) or IRA is invested. Your investment objectives may need to be updated to better match your goals.

  • Review your beneficiaries and heirs listed on your wills, life insurance, and financial accounts, including all retirement accounts, to make sure they are up to date.


Protection Planning

  • Review life insurance policies to ensure you have the right amount and type of coverage since your needs may have changed.

  • Make sure you are adequately covered by disability income insurance.

  • Explore your options for long-term care insurance.


In your 50’s

Savings/Retirement Planning

  • Revisit your retirement savings goals to make sure they still make sense.

  • If you’re behind on savings, catch up by taking advantage of higher contribution limits for 401(k)s and IRAs.

  • Review your estate plan to make sure it is up to date with changes in your life and current laws. Confirm that executors and guardians are still properly chosen.


In your 60s

Savings/Retirement Planning

  • Consider your retirement income strategy. Determine whether you can live off a smaller percentage of your retirement assets and continue investing the majority or if you’re ready to begin receiving an income stream.

  • At retirement, keep your 401(k) assets in your employer’s plan if that is an asset, or rollover the balance to an IRA to retain the tax benefits.

  • If you earned a traditional pension, compare the payout options and make sure your choice doesn’t exclude you from other retiree benefits.

  • Find out when you can receive your full Social Security benefit. You may want to delay collection of your benefit up to age 70 to increase your monthly payout.


In your 70s

Savings/Retirement Planning

  • If you have a traditional IRA that you have yet to make withdrawals from, you must start taking money out after age 72 to avoid a large tax penalty.

  • Take a serious look at how you want to be remembered, in the form of inheritances or gifts to charity. Consult with your financial representative about how to leave a legacy in the most efficient way.

  • Start collecting Social Security at age 70 if you had chosen to delay your benefits.



ABOUT THE AUTHOR

Dr. Cathy Duffy, Ed.D., CMA. is a Financial Planner at Baystate Financial and has been teaching accounting at the college level for over 27 years. She has midwestern roots and currently lives in Vermont. Cathy is the proud mother of four children (22, 21, 20, 15), three cats and two dogs.


Neither MML Investors Services nor Baystate Financial provide tax or legal advice. Please consult your tax advisor or attorney for such guidance.


Securities and investment advisory services are offered through qualified registered representatives of MML Investors Services, LLC. Member SIPC. www.sipc.org OSJ: 1 Marina Park Drive, 16th Floor Boston MA 02210. 617-585-4500. CRN202412-5881592

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