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  • Writer's pictureNate Baim, MBA, CFP®

What to Tackle Financially as a Mid-Career Professional




When you hit that mid-career point, there are plenty of positives happening.


Between having more disposable income, seeing your 401(k) balance grow healthier, and starting to weigh bigger life purchases – there is a lot to think about. There is also some question-creep that starts to show up:

  • Are you saving enough?

  • Are you investing correctly?

  • Have you thought about risk?

  • How about estate planning?

  • What big purchases are coming up?


I get these questions all the time from clients.

There are a number of things you can begin to do to get ahead in peak earning years.


First, get your cash flow in order. Cash flow planning looks at the short-term and the long-term. And it’s not to be confused with budgeting. While budgeting is part of cash flow planning, the goals of each are very different. Budgeting is about making choices to keep spending in check. It’s about current expenses and works best over a short-term time horizon.

Cash flow planning is about creating abundance. The process helps you identify future income and expenses and plan for big-ticket items. Understanding and detailing your flows help inform you about your decisions. It gets you thinking big picture, investing strategically, minimizing taxes, and protecting your assets.


The key to cash flow planning? Get a plan in place for both your short-term and long-term goals. Once you identify what those are, cash flow planning becomes much easier.

After you get your cash flow plan in order, it’s time to get your tax-deferred investments together. Are you contributing the maximum to your 401(k) or IRA? And the benefit? Lowering your taxable income so you save on taxes while building wealth.


If you have kids – a 529 could be a top priority. The magic of compounding means that the money you put away now will grow and reduce those college costs. And depending on what state you live in, you may also have state-tax benefits. If you’ve got a late start, you can still catch up.

Once your tax-deferred approach is in order, it’s time to look into your taxable investments. A taxable brokerage account for additional funds can help you diversify your overall investments.


Finally, it’s time to get your estate in order. I know, I know – why think about an estate plan now? An estate plan protects you if you can’t make decisions for yourself and protects your kids and loved ones. There are a couple of key documents and getting them in place is easier than you think.


At the end of the day, you’re at an exciting point in your financial journey – but it’s also one where the stakes of a mistake are higher than ever.


Your financial future will thank you if you start to plan now.





Have something on your mind?

 

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