Benchmarks and Checklists

Many people love a good benchmark and want one-size-fits-all advice. It’s easy for all of us to say, “Just tell me what to do!” But our financial lives are more complicated than a checklist of dos and don’ts – and we probably wouldn’t follow the list exactly anyway. Rather, it’s important to save and spend based on each of our personal situations, goals, and circumstances – focusing on what we can control and planning for what we can’t.

That said, lists and benchmarks can give us a sense of where we stand and where we can start improving, taking things one step at a time. With that in mind, I found a series of articles from Lively that I think is worth sharing!

Health Savings Accounts

Note: Lively is a Health Savings Account (HSA) company, so there is a tilt toward HSA-related advice in their lists. I think HSAs are great, so that didn’t stop me from sharing their suggestions.

HSAs are valuable tools with triple tax advantages:

  1. You can deduct your HSA contributions.
  2. If you invest your HSA money, the earnings grow tax-free.
  3. You can withdraw your HSA money, tax-free, for qualified medical expenses.

To be eligible to contribute to an HSA, you do need to be enrolled in a high-deductible health insurance plan. This may or may not be an option through your employer-sponsored health insurance, but they’re worth considering if you are eligible!

Alright, here are Lively’s recommendations!

The 5 Best Financial Decisions You Can Make – In Your 20s, 30s, 40s, 50s, and 60s

Even if you’re 50, for example, I’d check the tips for those in their 20s, 30s, and 40s. You might have some catching up to do!

  • 5 Best Financial Decisions in your 20s
    1. Stay on top of your student loans repayments
    2. Start saving for unhappy surprises
      • Lucy’s Translation: Build up an emergency fund — and look for banks with no cost, high-yield savings accounts, such as Ally.
    3. Start savings for an older you
    4. Make sure you have health insurance
    5. Set your indulgence budget
      • Lucy’s Translation: Allocate dollars, within what you can afford, for trips, clothing, pets, eating out – whatever it is you want to be able to indulge in.
  • 5 Best Financial Decisions in your 30s
    1. Get your retirement savings rate to at least 10%
      • Lucy’s Translation: This is a benchmark. Depending on your goals, this might be way too low.
    2. Don’t become a leakage statistic
      • Lucy’s Translation: Do not take out money you have saved for retirement, such as funds in a 401(k).
    3. Slow down before saving for college for your little ones
      • From the article: “Fight the urge to start a college savings fund if it means you will not be able to keep up saving for retirement. That’s not selfish…it’s taking care of your kids. Fast forward 30 or 40 years: the rugrats will be grown adults, relieved that you have saved enough to live comfortably in retirement.”
    4. Pay your health care costs with tax-free dollars (HSAs)
    5. Borrow the least you need
      • Lucy’s Translation: Avoid debt – and where inevitable (such as a home purchase), minimize it!
  • 5 Best Financial Decisions in your 40s
    1. Push for prime earnings
    2. Keep both hands on the retirement savings wheel
    3. Check the lifestyle creep
    4. Use tax-free dollars to cover medical costs (HSAs)
    5. Hatch a family college financial plan
  • 5 Best Financial Decisions in your 50s
    1. Play catch-up
      • Lucy’s Translation: When you turn 50, annual contribution limits for accounts like Roths and 401(k)s go up, so take advantage of them.
    2. Be house smart
    3. Create tax-free income for retirement, part 1 (Roths)
    4. Create tax-free income for retirement, part 2 (HSAs)
    5. Protect yourself and your loved ones
      • Lucy’s Translation: Estate planning is extremely important. And as a pro tip for anyone at any age, many accounts – including checking and savings accounts – allow you to add Transfer On Death (TOD) beneficiaries. You can sometimes add these online without any paperwork. This directs where money in an account will go once you pass – without the need for a will or trust. It’s a quick way to get things in order (or at least put something in place until you do more formal estate planning, for those that need it). This process is similar to adding beneficiaries to your 401(k) account through your online portal or a quick form – do it!
  • 5 Best Financial Decisions in your 60s
    1. Set your retirement budget
    2. Keep saving and utilize catch-up contributions
    3. Prepare your investments/portfolio
      • Lucy’s Translation: You likely want to reduce investment risk (your exposure to stocks) and increase safe assets (bonds) over time and especially as retirement draws nearer. Essentially, you’re taking some of your chips off the table to capture investment gains you’ve benefitted from in the decades leading up to retirement. One of the worst things that can happen early in retirement is having too much of your investable assets in stocks and then watching the stock market crash. Talk to a financial planner about this!
    4. Decide when to take Social Security
      • Lucy’s Translation: You maximize your Social Security benefit by delaying to age 70. This is usually a financially smart decision for those in good health.
    5. Find your place to live, and give it a test

While still keeping your personal situation and goals in mind, there is some solid advice here. While I’ve provided summaries, their articles have more details you will likely find helpful!

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