9 Vital Financial Questions for People Over 40

As families transition from their 30’s to their 40’s and their 50’s to their 60’s, the role of financial planning shifts.

Older couples obviously have different planning needs than couples with young children. And while the parenting role never goes away, it shifts over time. And in some cases, it takes on an even greater significance.

For older individuals, in particular, there are unique considerations and questions that should be addressed to not only ensure financial security and peace of mind, but also the transfer of your values to the next generation. Whether you've amassed wealth over a lifetime of hard work or inherited it, asking the right questions about money can help you make informed decisions and safeguard your financial well-being while transferring the things that matter most in life.

Here are some key questions that people over 40 should ask themselves:

What Are My Values Around Money?

When your values are clear, your decisions are easy. Have you spent the time diving into your values around money? If you don’t know your values, no one else will. Make sure you spend time determining what is important to you around money, and the role that money plays in your life.

Have I Communicated My Values Around Money To My Family?

The example you are setting for your children and your grandchildren by how you spend your time, your money and your energy communicate what you value most. When people tell me that there is something in their life that is really important to them, I facetiously ask them to show me their checkbook and their calendar, because that’s where the rubber meets the road. 

What Kind of Legacy Do I Want to Leave?

If you have done the planning, and you are clear that you are not going to run out of money, then the next question is: “What kind of impact do I want to have with the money I leave behind?” If you leave it to your children or grandchildren, will it help them or hurt them? Would establishing a charitable foundation or donor-advised fund have a meaningful impact on the organizations you care about? Integrating philanthropy into your financial plan may not only help you to live out your higher calling in life, it may also provide tax benefits while leaving a lasting impact on organizations that are making a difference in the lives of others.

How Will I Protect My Wealth for Future Generations? 

If you choose to leave some of your wealth to your children and grandchildren, then transferring that wealth with the least amount of taxes, court fees and legal fees matters. Preserving wealth for future generations is a common concern as you get older. Estate planning, including wills, trusts, and other strategies, can help ensure that your assets are distributed according to your wishes while minimizing the legal burden and tax implications for your heirs.

Am I Maximizing Tax Efficiency? 

Tax planning can have a significant impact on the preservation of wealth. Explore strategies such as charitable giving, tax-efficient investments, and tax-efficient distribution strategies to minimize your tax burden. Working with an advisory firm that has a deep understanding of the tax code can also increase the productivity of your assets by ensuring your assets are in the most tax-efficient investment structures.

Do I Have Sufficient Liquidity?

Liquidity ensures that you have access to funds when needed, especially in emergencies or during market downturns. Evaluate your portfolio to ensure you have an appropriate level of liquidity to cover expenses and take advantage of investment opportunities without disrupting your long-term financial plan.

Do I Have a Backup Plan If The Financial Steward Dies Or Develops Dementia? 

If your spouse oversees the finances of your household, and your spouse becomes incapable of making those decisions, who will take over that responsibility? Developing a good advisory relationship with a comprehensive wealth management firm can lessen that burden, and both spouses should be involved in deciding what firm to work with.

Am I Prepared for Unexpected Events?

Despite careful planning, unexpected events can impact your financial security. Consider factors such as disability insurance, long-term care planning, and an emergency fund to protect against unforeseen circumstances. Having a contingency plan in place can provide peace of mind and protect your wealth.

Have I Reviewed My Financial Plan Recently?

Financial circumstances and goals can change over time, so it's essential to review your financial plan regularly. Reassess your portfolio, estate plan, and overall financial strategy to ensure they remain aligned with your values, current needs and objectives. Periodic reviews with your financial advisor can help identify any necessary adjustments.

In conclusion, there are unique financial considerations that require careful planning. By asking yourself these key questions, you can make better decisions about your money, protect your wealth, and achieve your long-term financial goals.

To hear more about how Monotelo’s Financial Road Map® process can help you address these questions, and how we may be able to come alongside you in your financial journey, call our office and schedule your Financial Road Map® meeting today.