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Investment Tips for a Turbulent Market

Your age should influence your long-term financial strategy

When it comes to finances, time is on your side. But it’s not unlimited. While twenty-somethings have decades to plan for retirement, older investors must take different—and faster—paths to achieve the same results. Depending on your age, there are certain measures to ensure you’re on the right track financially during your career—and into your “golden years.”

At Any Age

  • Bring your budget into the 21st century. Budgeting software like Quicken or Microsoft Money can help you live within your means and spend less than you earn. They let you make a weekly or monthly budget to see where your money goes, and help you calculate a cash “allowance” to live on during that time period. There are also free online tools such as and

  • Automate your savings. Have your bank automatically send part of your paycheck to a savings account for emergencies or large purchases. Malay Vasavda, a financial planner at Quantum Financial Management in Chicago, says dual-income families should sock away 6-9 months of annual income, and sole earners should save 9-12 months’ worth.

  • Diversify your investments. Asset allocation and diversity are necessary aspects of any well-vested portfolio. Vasavda recommends having at least six different asset types in your mutual funds, from stable bonds to high-growth stocks, because different investment types perform better at different times. The easiest way to accomplish this is through low-cost, tax-efficient index funds.

  • Stay on top of your taxes. “They seem to change every year, so you must constantly stay on top of them to make sure you can take advantage of opportunities like Educator Credits and other tax-cutting strategies,” says Karin Maloney Stifler, a financial planner at True Wealth Advisors in Hudson, Ohio.

  • See a financial planner. Before you make any major investment, from buying your first home to entering your first year of retirement, it’s a good idea to see a financial expert who can help you prepare before you leap. For low-cost advice, contact the National Association of Personal Financial Advisors or the Garrett Planning Network to find a nearby expert who charges by the hour.

20s and 30s (Starting Out)

  • Make financial goals. You’ll get ahead in life easier if you know where you want to go. Ask yourself what you want to do in the next 5, 10 and 25 years. Then you can start making short-term, medium-term and long-term financial goals.

  • Start investing. As soon as your emergency savings fund is in place, put your extra cash into retirement funds. Besides your 403(b) fund, Vasavda recommends a Roth IRA because earnings on your investments are tax-free until the withdrawal age of 70 1/2. Because you have years for the market to recover, he advises putting 75%-90% in stocks.

  • Partner with your spouse. Make sure both of you agree financially. Discuss each other’s philosophy about debt, investing, financial goals, etc. Then delegate responsibilities, like bill-paying, tax prep and household budgets. “By being honest and open now, you’ll have solid finances and a stronger marriage for life,” says Stifler.

  • Pay off debt quickly. You’ll have more money to invest if you pay off non-mortgage debt, like student debt and auto loans. A helpful way to curb credit card debt is to use just one or two low-interest credit cards, no more.

40s and 50s (Midcareer)

  • Focus on retirement. Make this the priority over college funds (kids can get loans, but you can’t for retirement). Decide with a financial advisor when you want to retire, how much money you’ll want to have by then, and how much money you’ll need to save now to achieve that goal.

  • Reconsider your portfolio. It’s a good time to rebalance it so you have less exposure to a topsy-turvy market. Lower your stock holdings to 50% from 75%, and put the rest in bonds.

  • Protect your assets. Be prepared for life’s “what-ifs” while you and your children are still young. Make sure you have set up a will, power of attorney, healthcare directives and an appropriate life insurance policy.

  • Look at healthcare costs. Prepare now for long-term expenses like nursing homes or at-home care. Long-term care insurance is a good but often pricey option, so the earlier you sign up, the lower your premiums will be.

60 and Older (Retirement-Focused)

  • Pay with cash first. “Withdrawing from your portfolio in a down market is a bad idea,” says Vasavda. “You’ll have more later on when the market recovers.” Use cash reserves of 12-24 months’ annual income to pay your expenses first.

  • Adjust your asset allocation. Now is the time to become conservative. Vasavda recommends a 25%/75% stocks-to-bonds ratio.

  • Create a new budget. The 60s are the new 20s. More people are living to be 100 years old, so you need to ensure you have enough money for the next 20, 30, even 40 years. Determine the lifestyle you want in order to find out how much you can spend every year to make your money last.

  • Maximize Social Security benefits. If you’re feeling secure about your pension, hold off on collecting Social Security until a few years after your 62nd birthday. This will allow you to collect more per month. If you’re married, consider using the benefits for one qualifying spouse and waiting on the other’s until the full retirement age.


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