As you approach 40, life enters a new phase that’s filled with both opportunities and responsibilities alike. This is a pivotal period in one’s life that serves as a financial checkpoint, and so, demands careful consideration and planning.
Re-Evaluate Your Health Insurance
Your health is your most valuable asset, and as you age, it becomes increasingly important to safeguard it.
Says Bhuvanaa Shreeram, co-founder and head of financial planning at House of Alpha: “Ensure that your insurance covers age-related ailments and has adequate coverage for your family’s evolving needs.”
One shouldn’t wait until there is a health crisis. Proactive planning can provide a safeguard against significant financial strain.
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According to experts, before buying any health insurance policy, one should consider two factors – extensive coverage and a pre-existing waiting period. When selecting a plan, one should pay close attention to the waiting period and go for a policy with the shortest duration to ensure that one receives comprehensive coverage sooner.
Monitor Your Credit Score
Maintaining a healthy credit score is essential, especially if you have big financial goals in mind, such as purchasing a home, among others. Thus, one should regularly monitor one’s credit score and see that it remains robust. A strong credit score not only makes it easier to secure loans and mortgages, but also often leads to more favourable rates of interest, thus saving you money in the long run.
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Assess Homeownership Feasibility
If you haven’t already taken the plunge into homeownership, now is an excellent time to assess whether it’s feasible for you to get one.
According to Shreeram one should typically go for a home they would be comfortable living in after their retirement. “If you decide to take a home loan at the age of 40, remember that you have just enough time to pay it off before retiring, so plan your finances accordingly,” she says.
Prioritise Education Funds
For those with children, creating and maintaining a dedicated education fund is crucial. The cost of higher education is continuously rising. Thus, it’s essential to review and augment your investments
for funding your child’s education needs. Start early to make sure you have enough to secure your child’s financial future.
Ramp Up Retirement Contributions
Retirement planning is not a one-time event; it is an ongoing process. While you may already be contributing to retirement accounts for tax saving purpose or as part of your employment benefits, consider increasing your contributions to these. Target a comfortable nest egg and ensure it is well-funded and well-managed to support your retirement goals.
Balancing Personal Aspirations And Family Security
As you approach your 40s, the “midlife itch” might lead you to consider shifting careers or exploring new ventures. While these pursuits can be exciting and fulfilling, it’s crucial to assess the financial implications, too.
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It’s important to strike a delicate balance between personal aspirations and family security. Make sure your financial planning aligns with your ambitions and commitments.
Turning 40 is not just a milestone; it’s an opportunity to take stock of your financial health and make necessary adjustments. Following these financial checks can help you secure your financial future and enjoy the next chapter of your life with confidence and peace of mind.
