40 is the new 30, or something like that

As I write these age related posts I can’t help but think of all the different people I know of different age groups and different points in their life. I don’t for one minute think that each age group comes from a cookie cutter and I know that a lot of these tips are cross generational.

The beauty of our current culture is how easy it is for people to live their life the way in which they want to. You don’t have to have kids, you don’t have to get married, and you don’t actually need to stay put to work. The internet makes it totally possible to work and earn an income as you travel around the world. How truly amazing! So whilst I have general tips for your age category, feel free to traipse through each of the different ages as many of these tips may relate to you. There is no pigeon holing going on here.


Anyway, today I am going to talk about the 40 to 50 category and I think this is where things really start to get serious in terms of future planning.  You have enough time to get some serious dough behind you, but you are also in that age group where you can actually start to picture retirement now. I think this is a pretty important time financially, so here are my top tips for rocking your 40s.

1. Start thinking super – This is the time you need to start seriously considering contributing extra into your super account. Studies show you need a minimum of $510,000 in super to retire comfortably, and if you don’t make extra contributions, most people won’t get there on the 9.25% mandatory payments.

Currently you can contribute up to $25,000 per year including your employer payments and these payments are tax deductible.

As your super account will be getting heftier, you should also think about whether your current fund is the best option for you. The higher account balance, the more investment options you should have available to you. Some of the basic funds only have the bear minimum so it may be time to upgrade from your account that you set up in your 20’s.

2. Investing – Hopefully your cash flow is higher and you have paid down some of your home loan. There are so many ways for you to invest and now is the time to get involved if you haven’t already. In theory you have about 20 years until you retire so you have time to weather the markets and accumulate some wealth.

Your risk appetite will help to determine the kind of investments you should be aiming for. For the thick skinned you may consider borrowing money to invest in the share market, or you may want to invest in property.

Talk to a professional about your options. You may be scared of shares, but there are so many investment options available to you and an adviser will be able to ensure that your investments are inline with what you are comfortable with.

3. What about your parents? – Aged care for your parents is a serious consideration for people in this category. The more prepared you are the better. You may need to start the discussion with your parents sooner rather than later. Accommodation bonds can be very expensive and usually entail selling the home. This can be a pretty emotional time for older parents so talking about the financial aspect is important.

There are professionals who specialise in this area of finance so you don’t have to go it alone.

4. Will please! – If you have already addressed this, then good job, gold star to you. If you haven’t then you need to get a Will in place for you and your family. Assigning an executor to your will is also important and must not be taken lightly. This is the person who will be ensuring that your wishes are carried out.

You may also want to consider an enduring power of attorney for both financial and medical issues. This means that you allocate one person to make decisions on your behalf if you are unable to do so.

I have heard the saying ‘life begins at 40’ which I definitely think can be true when it comes to your finances. Doing the right things in this age bracket can really set you up for success.

Please feel free to drop me a line if you have any questions. Also see the 20’s and the 30’s links to the related posts.

– This post is from our resident senior financial planner, Cara Brett. Check out her details in our about us page.

Posted in: Financial Planning and Cara Brett

About the author: Cara Brett

Cara Brett proudly heads up Bounce Financial - founded in 2014 after a successful, decade-long career in the financial services industry. Cara’s experience encompasses both the financial product and financial advice sides. This gives her a comprehensive and holistic knowledge of all facets of financial planning.