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Personal Finance Checklist

Hat tip to @kieroniusrex for the great idea. This is a checklist for late 40's-early 60's but maybe will let people younger than that envision themselves at these ages. I don't want to frame these as "you should" but more like targets or benchmarks that might make life easier.

    1. Get your health in order

    The financial impact is the hundreds of thousands (literally) you might save not paying for prescriptions and doctor visits. Cutting carbohydrate and seed oil consumption is the simplest path to reversing/preventing many chronic maladies like T2D, high blood pressure, whatever you got--Google it to find studies for your issue. I promise you, that whatever you have, low carb has been studied in conjunction with it.

    Eat meat. Sorry vegetarians and vegans, it is pretty much impossible to get enough bioavailable protein without meat, at the very least, eat a lot of salmon.

    Start lifting weights, this will prevent you from becoming frail. In EMT school they really pound it into us how serious (life changing) a ground level fall can be. No one wants to lose their independence because they fell in the kitchen.


    2. Robust emergency fund

    Stuff around your house breaks or gets otherwise damaged, something could happen to your primary source of income. Unexpected things that we can't imagine happen all the time and a robust emergency fund will make the unexpected much easier to handle and endure.

    3. Visibility to being mortgage free

    Hopefully you got a 15 year mortgage that will be paid off some time in your 50's. We paid ours off last month coincidentally, hopefully we can last for many more years in our house having no payment. In terms of retirement planning, being able to lop that $1500 or $2500 or whatever off your budget will make things much easier.

    4. Have different types of retirement/other accounts

    Health Savings Account- (if eligible) is probably the most important type to have for its flexibility

    Roth account- no tax benefit for contributions, no tax owed on withdrawals

    Traditional IRA/401k- tax benefit for contributions, tax owed on withdrawals

    Non-qualified- primarily your emergency fund could also be for investing if you have enough assets

    5. Make sure your retirement math is on pace to work

    If you're not going to have enough then something will have to give. Work longer, spend less, downsize, something....something will have to give. Start thinking about how you could generate income in retirement like a post retirement career or monetizing a hobby or something else.

    6. Learn about sequence of return risk

    This is the risk that three months or six months or some other short time frame right before or right after your planned retirement date, we have some sort of horrible bear market for stocks. The way to mitigate this is to set aside some number of months/years, whatever makes you comfortable, in expected expenses so that your life is not turned inside out because the S&P 500 fell 30%.

    7. Make sure you understand how Social Security works

    The SSA wants you to know how much you're slated to get, create an online account and check it once a year. I won't say to take it late or take it early, that is up to the individual, there's no wrong answer generally speaking but the program is very complicated and it is easy to make costly mistakes unique to your situation. My preference continues to be take it at 70 so that if I die young, my wife who is 6 years younger will get the bigger payout. If you don't understand that last sentence, you've got some learning to do. Don't wait.

    8. What about annuities?

    I don't sell annuities so I have no dog in the fight. They are very expensive with maybe one exception but everyone I know who has one, loves them, go figure. My hunch is that someone who loves their annuity doesn't realize how expensive it is. I just learned about a type of annuity though called a QLAC that would allow for sheltering $135,000 (maybe it's $125,000?) from taking required minimum distributions until age 85). If you don't know those terms, you've got some learning to do.

    9. Keep living below your means

    We've done this our whole married life together. When I was younger, like maybe 40, we started to reap the benefits of living below our means up until that point, we've continued to do so and thanks to figuring this out so long ago we don't really have money worries. That doesn't mean we're rich, we are not but we are comfortable and we don't worry about money. Life is much easier not worrying about money.

    10. Have backup plans

    For me

    Plan A continue to manage money to a very old age, live on that income, rental income and SS while leaving our savings to things like emergencies and big expenses, not regular expenses.

    Plan B Do incident management work (this is fire related) for a few years, rental income, SS and maybe a little from our savings

    Plan C Be more reliant on our savings if some how I have no active income

    Plan D Downsize

    11. What does success look like?

    For me, success is setting my own schedule, not worrying about money and still being able to get it done physically. If time is our most precious asset than giving time away to a daily commute, to worries about money, to time spent at the doctor is squandering that precious asset, it is the opposite of success, it is an unfortunate way to live and save for a couple of simple behavior changes, it is an unnecessary way to live.

    What does success look like for you? Figure that out and then hopefully you can make that happen.

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