Financial Life Planning For Mid-Career Professionals In Their 40s To 50s

In the previous article, we talked about financial life planning from the standpoint of someone in their late 20s/early 30s. Here we’ll talk about the process from the mid-career perspective, when professionals are in their 40s and 50s.

Mid-Career: The Sweet Spot For Financial Life Planning?

The vast majority of our clients are in their 40s to 50s. While it’s never too early to start planning for retirement, in general this age range is the optimal range to do so. The typical mid-career professional has advanced in their career to the point where they are making a substantial income. They will likely also have accumulated a fair amount of assets including a home and an investment portfolio. Most will have at least started saving for retirement, and perhaps already have a decent-sized retirement account balance. 

The more resources we have, the more the possibilities, questions, and risks. As our retirement savings start to build up, the prospect of retirement moves becomes more real in our minds. It makes us think of a few questions: When could we retire? What do we want our retirements to look like? How much money would we need to realize that vision? Are we on track to reach that amount, and how soon?  

Collectively, all of these questions are already a lot to process. Further adding to the complexity of the situation are the financial demands of our present lives. The mid-career stage often comes with increased major life expenses, such as college savings for the children or upgrading the family home. We might also need to assist aging parents. We need to live in the present and provide for our loved ones, but at the same time provide for our own future.

In your late 20s and early 30s, retirement might seem more like an abstract concept off in the far distance. But now, in your 40s to 50s, there are now many specific, actionable financial things you can do that will directly affect your retirement. 

What buttons and levers will I need to push and pull to get to my goal, in the time I want? That’s where we as financial life planners can help.

Answering The Necessary Retirement Questions

The common wisdom we hear now is to “live your best life,” and retirement is no exception. In order to start formulating answers to what a client wants out of their retirement, it’s good to first start with the when. One of the most common questions we receive from clients is when can they retire with their current trajectory, or whether it’d be possible to accelerate their retirement timetable. When we have a when, we put a stake in the ground and have a target to aim for.

The Why

To help consider the when of a retirement, we’ll actually first try to get to know the why. Why does the client want to retire sooner than normal/within a specified timeframe?

Without a why, retirement planning is a simple matter of running the numbers through an online financial calculator. But if we as financial life planners can understand the why—whether it be job satisfaction, more time with the family, or something else—we can identify additional avenues and alternative paths to reaching the goal. 

The Who

Ideal retirements come in many forms. Some want to enjoy life to the fullest, and some want to make an impact on their community and loved ones. Most want a mixture of both. The right answer depends on the client themselves.

So we will first work with you to discover the values and ideas that are most important to you. In other words, we’ll drill down a bit into who you are as a client (to the extent that you wish to reveal, of course).

The What

With your values and priorities in mind, we’ll then work out the things you want to do in retirement, as well as the things you don’t want to do. 

“Living your best life” doesn’t necessarily mean “no work at all”. You might actually enjoy your work, but no longer want the daily grind. In that case, you might consider the possibility of working on a part-time basis. 

Or you might enjoy a particular aspect of what you do, from which you could then pivot into an adjacent role or focused consulting practice.

Retirement is also a time to go hard after your dreams. We’ve worked with many clients who want to try a completely different vocation, or start a fun hobby-based business. This pursuit could require a significant investment of financial resources, so it’s important to go through the numbers and scenarios with a financial life planner first. An additional option of course could also be non-profit or volunteer work with meaningful causes.

Fulfilling part-time work, paid or volunteer, can be a transitory stage between full-time work and full-time leisure. It can also be a retirement activity itself. The additional income can be used to enhance the retirement quality of life, move up the retirement target date, or extend the retirement horizon.

Putting It All Together 

Once we have the when, why, who, and what, we can determine what your best retirement life actually means. We can then estimate the impact on your retirement savings and formulate a financial plan to serve as the road map for you to accomplish your vision in the target timeframe. 

We can also show the ramifications and effects of major financial decisions, such as if you were to start your own business now, or wanted to upgrade to a larger home.

We won’t just stop there of course. As a mid-career professional, you likely have a very busy life. We’ll help keep abreast of the financial plan we created and be on the alert for any things that might affect it. We’ll meet with you regularly to keep you updated, point out new possibilities, and make adjustments as needed to keep you on a smooth path towards your ideal retirement.

We’d be happy to answer any questions you might have about the retirement planning process. Contact us now to schedule a free, zero obligation chat.