Investing and Money Management Through the Ages

By Amanda N. Wegner

As women age and move through life’s milestones, they have different money needs. Here’s a breakdown of considerations for each age range.

In Your 20s

The first rule of your 20s, says Norman, is to “not spend more than you make.” The 20s are also a time to balance paying down debt while budgeting for your lifestyle and saving for the future. “It takes some effort to find the right balance,” acknowledges Norman.

Secondly, maximize the contribution to your employer-sponsored retirement plan to take advantage of your employer’s match to your 401K, says Burish.

“Even though money might be tight when you’re starting, put as much as you can in this benefit,” she explains. “Even if it’s just $50 to $100 a month, by 65, you could have $1 million, historically speaking. ”

Burish also suggests asking if it’s possible to invest in both a tax- deferred traditional IRA and a tax-free Roth IRA in your 401K, which have different implications tax-wise in retirement.

In your 20s, Burish also recommends getting life insurance; you may not think you need it, but it secures your insurability for the long run.

“You don’t know what life is going to serve you, health-wise. If you are coming out of college healthy but later get cancer or need therapy for mental wellness, which requires anti-anxiety meds, that could unhinge your ability to get insurance in the future,” she explains.

In Your 30s

By now, you’ve likely been working for eight to 10 years, increasing your earning power. Norman says women should strive to put 10%-15% of their income toward retirement, so your 30s may be a time to shift resources as your debt decreases and income increases.

Also, “When things happen positively with money, like a student loan payoff or you have a positive shift in your budget, allocate some of that toward savings. Don’t go about spending all of that amount — try to increase your savings.”

If purchasing a home is a to-do in your 30s, remember that no more than 30% of your monthly income should go to home expenses, including mortgage, property taxes and home improvements, so plan accordingly.

If you have children, consider saving for their college needs. The state’s 529 plan is a tax-advantaged plan to cover education costs.

A Roth IRA, which is a tax-free option with fewer disbursement penalties than a traditional IRA, may also be an option to use for college savings as there are no penalties to withdraw that money (you may be taxed on earnings, though).

In general, Norman cautions against prioritizing future education needs over your retirement.

“Kids can get loans for college, but you can’t get loans for retirement.”

In Your 40s

Norman says that since you’ve been building a nest egg and accumulating assets over two decades, it’s time to protect your wealth and your family by looking into an estate plan. An estate plan typically includes a will and powers of attorney for health care and financial decision-making. You also want to make sure your beneficiaries are up to date in all of your accounts (401K, insurance policies, etc.).

Look into long-term care insurance between the ages of 45 and 50, says Burish, and have the same conversation with your parents.

Like an automotive or home insurance policy, long-term care plans help pay for caregiving services as we age. It’s a common misconception, says Ridley Hanson, that Medicare and Medicaid will cover the entire cost of assisted living and other caregiving needs. It covers some costs, but not much. (Ridley Hanson says in her experience, you can also wait to look into this type of insurance when you’re in your 60s — ideally by age 65 — so ask a financial planner what they recommend in your circumstance.)

“If you don’t plan long-term care for yourself, your spouse or your family, you will end up paying for it, either with time or resources,” Burish says of caregiving needs.

In your 40s, start to narrow in on when you want to retire and then work with your financial advisor, says Norman, to make sure you’re on track. Burish adds it’s not unreasonable to get a “second opinion” on your financial advisor occasionally to ensure who you are working with continues to be a good fit.

In Your 50s

In your 50s (or sooner), check the “tax mindfulness” of your retirement plan to ensure your investments are diversified in terms of tax implications. For instance, explains Burish, a traditional IRA plan is tax-deferred, meaning you didn’t pay taxes on it when you invested that money, so the taxes come out when you withdraw it in retirement, which could be up to 50% of your savings. If all of your retirement savings are in a tax-deferred option, you will have much less to use in retirement, so don’t wait to diversify those funds to maximize your savings and tax situation.

“There are various buckets you want to have [your money in]. A lot of people think their 401K is all they need, but a Roth should also be one of those buckets you’re proactively filling,” explains Burish.

In 2023, the maximum amount a person under age 50 can contribute to a Roth is $6,500. If you’re over age 50, you can make a catch-up contribution of $1,000 per year to a Roth account for a total of up to $7,500 per year.

60s and Beyond

Your 60s and beyond, says Norman, brings a few milestones and decisions. One is when to take Social Security. Another is choosing a Medicare insurance plan.

“These can be challenging decisions,” says Norman, “especially the Medicare piece. While it can be daunting, take time to get up to speed and understand your options.” Norman recommends reading up on both of these on and

Also, adds Ridley Hanson, just because you’re near or in retirement, that doesn’t mean planning for your future is complete.

“If you retire at age 65 and are of average health, you could live at least until age 85 or [longer], so you have 20 years — and hopefully more — to make that money last. But we’ll still have inflation, market turns, increased costs. As you get into retirement, reevaluate your plan and keep it going by finding the right mix that works for you with both stability and some growth.”

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