Finding a Financial Balance at Mid-Career

Looking Toward Retirement Doesn’t Have to Be Scary!

People in their mid-careers (usually aged 40-50s) often find themselves at an odd financial stage. While their careers are usually at a strong, steady place, their finances may be dwindling due to mortgages, loans, credit card bills, and insurance premiums. At this point, retirement seems more real than it did ten years ago, but the pressure to save can seem burdensome.

For those in mid-career (dare we say mid-life!), here is some advice that may help:

1. Make a plan, be disciplined and don’t lose sight of your long-term plans

With an advancing career trajectory and rising expenses, people are tempted to deviate from the long-term goal – retirement. Make every possible effort to follow a disciplined savings strategy. Try not to let the idea of purchasing a bunch of unnecessary stuff distract you. It is important to save consistently. Consider investing in an IRA and increase your contributions as your wages rise.

2. Pay off 90% of your debt obligations

By the time you are in your mid-career, the only debt obligation you should have is your home loan – and maybe an auto loan. Try to remain almost debt-free in this phase of your life since your financial obligations are likely to double with your retirement so close.

3. Maximize retirement savings

You should prioritize your retirement first. No matter how many other financial obligations stand in your way, you must lay a solid foundation now for your future non-working years. In this context, while it is essential to save, it is also vital to maximize your retirement savings by placing them in tax-advantaged accounts such as an individual retirement account (IRA). Given the restrictions of maximum contributions to IRAs, it might be challenging to reach your goals with an IRA alone. If you max out your annual contributions to your retirement savings accounts, analyze other retirement options such as health savings accounts, etc. to maximize your funds.

4. Insurance is an utmost necessity

At mid-career, people usually have dependent family members, increasing healthcare needs, mortgages, etc. All insurance policies, including health, disability, property, life insurance, and others, should remain intact. Exhaustive insurance policies may sound like a piece of conventional advice, but these always provide for tough times. It is best to opt for insurance policies as early on in life since the premiums will increase as your age advances. Ironworkers USA Credit Union offers an array of insurance options. Visit here for more details.

5. Start or upgrade your contingency fund

No matter your age, having a contingency/savings fund is always a smart idea. But it’s important to note that the amount that needs to be secured leaps when you are in your mid-life as compared to younger days. Try to create a contingency fund to sustain almost one year of expenses without an income rather than six months – which was usually sufficient to sustain expenses in your younger years. This fund needs to increase not only because you are liable to incur more expenses but also because finding a job at this stage of your career may be more challenging given your experience and qualifications.

It’s important to take calculated steps to reach your goals. YOUR Credit Union is here to help you at every stage. Whether you want to start an IRA, want help creating a budget or a savings plan, or need advice before purchasing insurance, Ironworkers USA Credit Union is your partner. Give us a call at 1-877-769-4766, stop into one of our branches or chat with us online!


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