I'm in My 20s
While it may be too early to lash yourself to a specific plan, most people can count on four major life expenses:
- House and mortgage
- Raising children
You would be prudent to assume that your future includes some or all of these, and save accordingly. (If you're wrong, at least you'll be wealthy!)
Financial Planning in Your 20s
- Health and Lifestyle - If you're like most people in their 20s, you may never be this carefree again. Do your future self a favor by making the most of this. Start positive lifelong habits now. Have 10% of your income deducted from every paycheck and deposited to a savings or investment account.
- Planning Your Retirement - While it's probably too early to tie yourself to a specific plan, there's no doubt you'll need money. More importantly, remember that every good decision—in finances, health, lifestyle, etc.—that you make now will multiply over the course of your life and make your retirement that much easier. Consider the possibility of an early retirement.
- Saving for Your Retirement - While retirement seems a long way off, starting your saving now—whether through your company's 401(k), a traditional or Roth IRA, or pensions—is a decision you'll thank yourself for later.
- Estate Planning - Estate planning is not just for older folks, is not just for the wealthy, and involves more than simply giving away your stuff when you die. In fact, some of the most important components of estate planning come into play while you're still alive.
- a will
- a durable power of attorney, which gives a trusted person the power to make financial decisions on your behalf if you become unable to do so yourself
- a living will, which describes your wishes regarding lifesaving treatments in the case of serious illness or injury
We strongly recommend consulting with an attorney in developing these legal documents.
In all areas involving beneficiaries (e.g., retirement accounts, insurance policies, etc.) review and verify your beneficiaries annually.
Buy the appropriate insurance to protect your current and future wealth.