Financial wellness at every decade
[Graphic of young man swimming. His torso and head are above the water and his right arm is raised above his head. He is wearing a swim cap and goggles. There is a bird on the right sitting on top of the waves. And there is the sun behind him and clouds and birds in the sky.]
Financial Wellness at Every Decade
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Sometimes navigating your finances can feel like swimming against the tide, but with some financial wellness goals to keep you afloat, you can keep swimming until you reach calm waters.
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Financial Wellness has four key components:
Strategy
Protecting yourself with financial products
education
and having a relationship with a financial professional
Here are some markers to look out for at each decade of life to keep yourself swimming straight to a confident retirement.
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Your 20s
DIVING IN
As you dive into the work world, stay mindful of the long game.
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$9,200
World-class saver annual average[i]
FINANCIAL WELLNESS MARKERS
[Graphic of a sun and inside the sun are the words, “One way to achieve financial wellness is becoming a world-class saver: saving 15-20% of your annual income.]
Paying off debt
$21,700
Average student loan debt of an American adult in their 20s[ii]
Protect your progress with a disability insurance policy
25%
Of 20-year-olds will become disabled at some point in their working life[iii]
Start contributing to your retirement fund
1%
Consider setting an annual 1% auto-increase within your employer sponsored plan
Build an investment portfolio
Many financial professionals recommend growth vehicles at this age, transitioning into more risk averse options as you age
[Graphic of a person diving into waves. Only the person’s lower half is visible above the water, and they are wearing flippers on their feet. There are splashes of water coming up on either side of them.]
KEY ACTION ITEM
Establish a relationship with a financial professional and make a written financial strategy.
Only 37% of working Americans have a written financial strategy.
[Graphic of a sand beach with a sandcastle and crab on the left and a bucket and shovel in two heaps of sand on the right.]
Your 30s
SETTING THE PACE
As you continue your journey, focus on career development and prepare for milestones.
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$13,000
World-class saver annual average
FINANCIAL WELLNESS MARKERS:
Practice salary negotiation
70%
Of managers expect a negotiation when they make a job offer[iv]
Build a credit history
680
Average credit score of Millennials (age 24-39) in 2020
Save for home ownership
$93,000
Average annual income of home buyers in the U.S.[v]
Start shopping for life insurance
20x
Term life insurance can be an affordable option as you work toward other financial milestones. Many financial professionals recommend 20x income protection for someone in their 30s.[vi]
[Graphic of a young man swimming. He is wearing a swim cap and goggles. There are two birds flying in the sky above him.]
KEY ACTION ITEM
Make a budget and run it by your financial professional
15% of high-income earners making over $300,000 may have a hard time living within their means.[vii]
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Your 40s
IN THE FLOW
Life in this lane can be challenging, but it helps if you built momentum in your 30s.
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$15,000
World-class saver annual average
FINANCIAL WELLNESS MARKERS:
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Align your goals
If you have a spouse or life partner, discuss your shared finances and goals with a financial professional
Save for college
$41,400
Average cost of a year at a private university[viii]
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Enjoy debt-free leisure
$6,500
Average cost of a vacation for a family of four[ix]
Work toward home ownership
47
Median age of a U.S. home buyer[x]
[Graphic of a middle-aged man and a woman walking through waves with an inflatable tube around their waists. The man’s right arm is above his head, and he is wearing a swim cap and goggles on his head. The man and woman are both holding onto the inflatable tube with their left hands. There are splashes of water coming up on either side of them.]
KEY ACTION ITEM
Talk to your financial professional about whole life insurance
48% of households need more life insurance.[xi] In addition to its value as insurance, whole life accrues cash value and can help with major life events like sending the kids to college![xii][xiii]
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Your 50s
KEEP IT STEADY
Keep swimming!
These are often prime earning years.
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$15,200
World-class saver annual average
FINANCIAL WELLNESS MARKERS:
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Top up your retirement savings
Many financial professionals recommend about
25x
Your annual expenses.[xiv]
Use these high earning years to make sure you get there.
Plan for the sandwich – caring for children and aging parents at the same time
24%
Of parents are helping their adult children pay rent[xv] and
17%
Of Americans care for an elderly parent at some point in their lifetime.[xvi] If you’re at risk of being sandwiched, prepare early by getting protection in place and learning about assistance options, like certain life insurance products with long-term care features.
[Graphic of a two people swimming in the ocean. Only their bottom halves are visible. They are wearing flippers on their feet. There is a fish below them. Above the water there is a splash of water. A cloud and two flying birds are in the sky.]
KEY ACTION ITEM
Meet with your financial professional to discuss estate planning strategies.[xvii]
68% of Americans don’t have a will.[xviii] Make sure your family and legacy are protected; your financial professional can also help you with planning your beneficiaries, now and as you age.
[Graphic of fish with its head above water. Two birds flying in the sky above. There is a cloud in the sky as well. There is also a sailboat in the water and to the right is a beach with two palm trees. Two birds are flying in the sky above the beach.]
Your 60s
FINISHING STRONG
You’re near the goal! Many Americans retire this decade.
[Graphic of clouds in the sky with an orange bird underneath standing on a wavy line. The bird’s head is tilted up towards the sky. On the right, there is a graphic of a sun coming out of a cloud. A yellow bird is below the cloud standing on a wavy line with its head tilted up towards the sky.]
$14,000
World-class saver annual average
FINANCIAL WELLNESS MARKERS:
Consider delaying social security if you can, so you’ll have more income later
132%
If you delay retirement to age 70, you’ll receive 132% of the benefit you’d get for retiring at age 67. [xix]
Consider long-term or supplemental healthcare insurance
$300,000
Average health care expenses in retirement for a couple in 2021[xx]
[Graphic an older woman and man swimming in the ocean. They are both wearing glasses. There is a cloud in the sky above them to the left and to their right there is sand with two palm trees.]
KEY ACTION ITEM
Develop a retirement spending strategy with your financial professional
$219,000: amount needed to feed 2 people for 20 years at a cost of only $5 per meal.[xxi]
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Your 70s
HARD WORK PAYS OFF
You did it! Time to enjoy the fruits of your labor!
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18 years
Average length of retirement in the U.S.[xxii]
FINANCIAL WELLNESS MARKERS:
Spend wisely
$46,000
Average annual expenditures of older households[xxiii]
Stay active and engaged
40%
There is a 40% increased chance of clinical depression after retirement but staying active can help[xxiv]
KEY ACTION ITEM
Enjoy your retirement and pay it forward
Stay engaged with philanthropy or mentorship, or help the next generation learn about the power of having a financial strategy!
[Graphic of an older man and older woman standing on a beach. The man has his right arm raised in the air and the woman has both of her arms raised in the air. There is a palm tree in the distance to the left and closer to the man and woman is a wooden stake in the sand with a lifesaver inflatable ring hanging on it. To the right of the man and woman are two beach chairs and a crab next to one of the chairs. In the distance there are two palm trees. There is a bird standing on the beach in front of the man and woman.]
Remember, no matter how strong a swimmer you are, a lifeguard can help keep you protected. A Financial professional is like your own personal lifeguard who can help you find protection and keep you on track, no matter where you’re swimming. Talk to a financial professional today.
[i] 20% of median annual earnings of Americans with 4-year college degrees; earnings data from Education Pays 2019, CollegeBoard.
[ii] Student loan debt by age, educationdata.org, accessed May 2021
[iii] U.S. Social Security Administration Fact Sheet, June 2020
[iv] The Most Critical Reason You Need to Negotiate & How To Do It Effectively, Forbes.com, January 8, 2020
[v] This chart shows the impact of the current state of the property market on home buyers of all ages, MarketWatch, December 9, 2019
[vi] https://livingconfidently.com/protect-your-priorities/
[vii] From Concerned to Confident: The Guardian Study of Financial and Emotional Confidence, Guardian, 2016
[viii] What You Need to Know About College Tuition Costs, U.S. News and World Reports, September 2020
[ix] What Is the Average Cost of a Vacation?, spendmenot.com, April 2021
[x] This chart shows the impact of the current state of the property market on home buyers of all ages, MarketWatch, December 9, 2019
[xi] LIMRA, Trends in Life Insurance Ownership, 2016
[xii] Some whole life policies do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s third year. Talk to your financial representative and refer to your individual whole life policy illustration for more information.
[xiii] Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 1/2, any taxable withdrawal may also be subject to a 10% federal tax penalty.
[xiv] How the 25x Rule Can Help You Save for Retirement, Forbes,com, January 2021
[xv] Aging Parents Helping Adult Children Financially: Unhealthy Results, Forbes, July 9, 2018
[xvi] HOW MUCH LONG-TERM CARE DO ADULT CHILDREN PROVIDE?, Gal Wettstein and Alice Zulkarnain, Center for Retirement Research at Boston College, June 2017
[xvii] Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.
[xviii] 2021 Wills and Estate Planning Study, Caring.com
[xix] Ssa.gove, for U.S. adults born 1960 or later. The Social Security Administration has not approved, endorsed, or authorized this material. Contact the Social Security Administration for complete details regarding eligibility for benefits.
[xx] “How to plan for rising health care costs,” Fidelity, May 2021.
[xxi] https://livingconfidently.com/blog/will-you-be-eating-well-during-retirement/
[xxii] U.S. Census Bureau.
[xxiii] The Average Spending Amount in Retirement Is Surprisingly High, Financialsamurai.com, January 2021; “Older household” is defined as a household run by a person 65+
[xxiv] “Retirement causes a major decline in physical and mental health, new research finds,” Institute of Economic Affairs, May 2013.
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