3 Financial Goals I'm Trying to Accomplish by Age 40

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  • Turning 40 is a major life milestone.
  • Setting financial goals to accomplish by age 40 will help set me up for a secure future.
  • My goals relate to saving for retirement and investing for my children's future.

Accomplishing them could help set me up for a secure future.

In January of 2023, I'll celebrate my 40th birthday. 

Before I hit that milestone, there are a few key financial goals I hope to accomplish. I've set these goals because I believe accomplishing them will help me to have much more financial security in my later years -- and I've made age 40 my target deadline because I know I'm much more likely to accomplish my objectives when I have a time limit for doing so. 

So, what are the goals I'm aiming to achieve by next year? These are the three big objectives I've set for myself. 

1. Saving four times my annual income 

The biggest and most challenging goal I've set relates to my retirement savings. Specifically, I'm aiming to have four times my annual income saved in my IRA account at my preferred brokerage firm by my 40th birthday. 

This is above what most experts recommend. In fact, the general rule of thumb is to have around three times your annual income saved by 40. But because I want to retire early and because I'm self-employed so I don't have employer 401(k) contributions to count on, I've set a more aggressive goal. 

By reaching this milestone, I'll ensure I'm on track to build the nest egg I need for a more secure future. Saving for retirement is one of the most crucial financial goals everyone should set because it's not possible to comfortably live solely on Social Security benefits. Having a generous retirement investment account will ensure I don't struggle to pay bills late in life once I'm no longer able to work. 

2. Investing for my children's education

Building my retirement nest egg is my number one goal, and I've prioritized it over college funds for my kids. There's a simple reason for that: You can't borrow to fund retirement and it's a lot harder to overcome financial shortfalls later in life than when you're young and just starting out.

But while I'm focused on retirement savings, I also know paying for college for two kids will be expensive and I want to be able to help my children with that burden. I've started 529 accounts for both of my children and my goal is to have several thousand dollars in each account by the time I hit 40. 

Since I'm an older parent and my kids will be reaching college right around the time I'm ready to leave work, it's really important to me that I meet this objective so I can have enough money to help them out even if I'm no longer getting a paycheck. 

3. Having an emergency fund with a year of living expenses

Finally, I've set the goal of increasing my emergency fund to cover a year of living expenses. I've been slowly working on building up this fund over time, but I want to hit this milestone by 40 for a few reasons. I know that health issues are more likely to develop as I get older, and I also know that my house is aging and more costly surprise expenses are likely to crop up. 

Now, these are just my financial goals based on where I am in my life as I reach middle age -- but it's often a good idea for most people to tie their money objectives to specific ages or other deadlines. Having a timeline and a milestone to work toward can make it much more likely you'll actually accomplish the things you desire.  

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