For the past six months, The Bee has published its personal finance series, Investments A to Z, in an effort to give readers a short course in crafting their financial future. Financial planning goes far beyond budgeting or playing the stock market. Unfortunately, too many people put it off until they reach their 40s or early 50s. Those in their 20s need to focus their efforts on going for growth, controlling the use of their credit cards and thinking long term. On the other end of the age spectrum, those in retirement need to focus more on safety, keeping their portfolio intact and carefully budgeting to make sure that their money lasts as long as they do.
Financial planning is an ongoing process from the time one reaches adulthood through retirement.
Set aside six months of living expenses in emergency savings. On the other hand, if you work in an unstable industry, six months may not be enough. Retirees need 70 percent to 80 percent of their pre-retirement income to live on. People are living longer and are more active, which requires more money at retirement. Housing costs and taxes may go down, but travel and health care costs can rise.