How to Build a Financial Plan (By Age)

Introduction – Building a Financial Plan (0:00)

Brian: The Financial Order of Operations shows you what to do with your next dollar. But what do you do about things like life insurance, deeper tax strategy, and even estate planning?

Bo: And Brian, I am so excited because today we’re going to walk through how to build a financial plan, including the specific areas that you should focus on based on your age.

Brian: So, I’m Brian, he’s Bo, and we’re financial advisors here to fill in the missing gaps in your wealth-building plan. And with that, let’s dive right in.

Bo: So Brian, when it comes to financial planning, there are really sort of six areas that we’re taught about when you’re studying for the CFP or coming into the industry. And generally speaking, those areas are financial management, which is like budgeting and cash flow, estate planning, retirement planning, investment planning, tax planning, and risk management. But what’s interesting is even though these six areas sort of permeate a well-rounded, well thought out financial plan, what you want to focus on at each stage and in each decade varies based on where you are in your financial journey. So that’s exactly what we want to walk through today. Based on where you are, what age you are, what should you be focusing on if you’re going to build your very own financial plan.

Your 20s – Building the Foundation (1:17)

Brian: We’re wild and crazy enough financial advisors that we decided, let’s go ahead and look at each decade with that. Let’s get into the 20s. So, when we’re talking about building a base, one of the biggest things you can do for you is the shovel you use in your income because you’re going to build 10,000 hours to become an expert at something. And we want to kind of give some color on that there. There’s some data points, Bo, that I think give a lot of context. And I want people to pay attention to this. One in four young adults can’t find jobs in their desired career paths. If you lay that over the fact that, listen to this, 62% of college graduates are not working in their intended careers after finishing school.

Bo: Now, meaning like the career that would align with the major that they got.

Brian: So, they can’t find jobs in the careers that they went and chose. They also, 62% are not working in those careers. And then you overlay that with our millionaire clients and we find out it’s just the opposite. 67% of our clients actually work in their field of study. So what I’m telling you is measure twice, cut once. Make sure you pay attention to what you’re actually choosing to study in college as well as what your career field is.

Bo: Yeah. So focus on the education that you’re building. But there’s also these emotional and behavioral things that happen for folks in their 20s. A lot of folks, they want to look rich and look successful. They want all the trappings of what they think sound financial decisions are, but they often try to skip steps. They try to do those things before they actually should. So, when we think about the 20s, we think about, okay, what are the areas that you ought to be focusing on? Where should you focus your attention in sort of this wheel of financial planning? We really want you focusing on the financial management, which is cash flow and budgeting. We want you focusing on risk management and we want you focusing on investment planning. And let’s sort of dive into each one of these because I think Brian maybe the most important one is the financial management, the budgeting and cash flow.

Financial Management in Your 20s (3:14)

Brian: Of course, once you get that job, that job that’s totally going to be your career, it’s going to go beyond job and it’s going to be a career. You’re never going to have financial success unless you can live on less than you make. I mean, that is the basic ingredient of discipline. You got to get that right.

Bo: And we want you to spend after you’ve saved, not save after you spend. So often people get that twisted and when you get to the end of the pay cycle, end of the month, end of whatever time, you recognize there’s no money left over. So if you can master living on less than you make, you’re already ahead of a number of your peers. The other thing we want you to recognize is that debt in your 20s, well, debt anytime can be dangerous, but it can be especially dangerous in your 20s because it is literally a ball and chain you are going to carry throughout the rest of your working career.

Brian: Yeah. And just look at this stat, people in their 20s typically carrying around $20,000 in total debt. Now, look, to your defense, a lot of that is student loan debt. It’s back to that whole thing, begin with the end in mind. Think about how you’re going to be, where you’re going to be working, what you’re going to be doing, so you can be smart even with that college debt and the student loans so that they’re actually doing something for you.

Bo: And then the other thing we want you to do in your 20s, it’s okay to be frugal. You likely just came out of a season in life in college where you were able to live on a $20 bill for two and a half weeks. Remember those tactics, remember those techniques. And the more frugal you can be, the smaller your footprint can be in your 20s, the more margin you’re going to have to be able to build a bright future. And the great thing in your 20s is it only takes just a very little bit to go a very, very long way.

Brian: Both of us, I would say, started our careers and our journeys as tight wads, very lean and tight with money. But as we’ve had more and more success, we’ve become bougier and bougier with hotels, how things have to be. Guys, take advantage of when you’re young, you really do have the tolerance for a lot of things. You don’t have to fake it until you make it by trying to look and flex, but you know, go ahead and actually build in the discipline of saving and investing. It’s okay to embrace, you know, getting roommates. It’s okay to embrace when you travel to do it on the cheap, but dazzle your basic life. Create memories, but do it in a very affordable way.

Risk Management in Your 20s (5:30)

Bo: Now, another thing we also want you focusing on in your 20s is risk management. And oftentimes we think, “I’m young. I’m invincible. Nothing’s going to happen.” That’s something that happens to other folks. No one who’s ever been in a financial emergency planned on being in that financial emergency. So, we actually have some steps that can help you. Brian, you know the thing you need to hold up? We actually have the Financial Order of Operations to help you figure out what it is you should do with your next dollar. The very first thing we want you to do when it comes to how you’re building, how you’re saving, how you’re thinking about this is we want you to have your highest insurance deductible covered. Whether that’s your auto insurance, health insurance, homeowners, whatever that may be for you, we want you to have that much money sitting in liquid cash available.

Brian: Well, and a lot of you are like, why do that? That’s not cool. That’s not sexy. I want to go out there and make my money start working for me. But consider this. This will kind of give you really some perspective and context. 37% of adults said they could not cover a $400 expense in cash. Had to like go into debt or sell something. And look at this. Close to 67% of people who file for bankruptcy blame that on medical bills is the primary cause. So that’s why step one of the Financial Order of Operations, have your highest insurance deductible covered so that way you don’t let an emergency derail you before you even get out of the starting gate.

Bo: And in order to have an insurance deductible, it means that you need to have insurance in place. Far too often we see folks in their 20s out there swimming naked, not covering themselves and their property the way they should. So make sure that you have appropriate and fitting health insurance and property insurance for the assets you have. Whether that be the stuff in your rental, whether that be your automobile, make sure you’re adequately insured against those low probability, high cost losses.

Brian: You’re probably catching on, this risk management, they’re all interconnected with the highest deductible being step one of the Financial Order of Operations, health and property insurance for those catastrophic things. But then step four is you got to start building that emergency reserves because this is the margin. This is the layer of protection to keep you from the chaos of life. If you’re trying to figure out my 3 months, 6 months, we’ve got you covered. If you think about this, if you have high job security, that’s going to make it where, hey, you can be a little leaner with three months. But if you’re worried, hey, anytime this country could downsize, I might be looking for a new job, you probably want to boost up and have a little more protection. If there’s two of you working in your household, that gives you a little bit closer to 3 months. If you are the sole bread winner, let’s act accordingly and boost up those emergency reserves. Pay attention to these things so you can figure out, am I 3 months, am I 6 months? We’ve got you covered if you need to go a little deeper on this.

Investment Planning in Your 20s (8:15)

Bo: All right. So, you’ve handled the cash flow and budgeting. You’ve handled the risk management. Now, let’s talk about the exciting part. What should you be thinking from an investment perspective in your 20s? And one of the things that we think is so interesting is people try to over complicate this. I try to make it way harder than it has to be. But if you’re in your 20s and you can just understand the idea of a wealth multiplier, the thought that if I just have $1 deferred today, that $1 can multiply through time for me, it will change the way you think about consuming, it will change the way that you think about saving. It’s why we talk all the time here at Abound Wealth, here at the Money Guy Show about the wealth multiplier.

Brian: Yeah, this is one because look, there’s going to be so much temptation when you’re young and in your 20s to go out there and live your best life. We even react to content like that all the time. And I’m always, I’m on the rooftop screaming, guys, yes, it’s true, you’re young, but you’re a literally a billionaire of time. Act accordingly. Because look how much easier it is to build wealth if you’ll just do a little bit. I’m not even, it’s not a heavy lift. It’s a small light lift. For a 20-year-old, every dollar can grow to $88. For a 30-year-old, it’s $23. For a 40-year-old, $7. And what that means for you, the power of starting early. If you’re trying to become a millionaire by the time you retire, for a 20-year-old, it’s $95 a month. For a 30-year-old, it’s $340 a month. That’s like four times harder. Bo, what happens if you wait until you’re 40? What happens there?

Bo: You have to save over $1,000 a month to get that same million. It’s 10 times harder than if you would have just started early, if you would have started at 20 years old. So, the earlier you can start, the easier the path is. So again, don’t over complicate. Okay, well guys, I love this. I want to invest. I want to invest, but I don’t know the first thing about stocks. I don’t know about bonds. I don’t understand that stuff. That’s okay. When you’re first starting out, maybe consider something like a target retirement index fund where all you really have to decide are two things. How much can I save and when do I think I’ll need the money? What year do I think I’ll retire? If you can answer those two questions, you can set it and forget it and make it super super easy.

Brian: Well, and I think in the beginning a lot of people, because there’s so much content around investments, they think that they have to become an expert. You don’t. The index version, the super cheap index variety version of target index funds, they make it so simple because your savings rate is so much more important even than the investment. This locks it in for you.

Bo: Yeah. And the way they work, the way that a target retirement index fund actually works is while you’re young, it’s going to be very aggressive. It’s going to hold a higher percentage of risk on assets, a higher percentage of equities, a lower percent of conservative assets. But as you age, as you get into your 30s, 40s, 50s, and so on, it will naturally allocate for you. So it removes you having to make those decisions. So if you can just focus on those two questions, when do I need the money? And then how much can I save? It is, almost in your 20s, you almost have to try to screw up building wealth.

Brian: Earlier I shared you’re a billionaire of time. So we obviously want you saving as much as you can. But if you need additional perspective just to kind of give yourself something to shoot for, we do have a great resource. If you go to moneyguy.com/resources, how much should you save? This is going to unlock and answer a lot of your questions. Especially if you want to go outside of normal. If you want to retire at 45, 50, 55, we got you covered. We can show you what the savings rate needs to be. If you want to do traditional, but maybe you got a later start, we got you covered on that. Go check out this great resource. Moneyguy.com/resources. Download your free copy right now.

Your 30s – The Messy Middle (11:55)

Bo: So, Brian, that’s the 20s. Now, let’s talk about the 30s. This is often the decade where we talk about it being the messy middle. You have a thousand different things pulling you in a thousand different directions and you don’t have a ton of discretionary money and you have even less discretionary time. And so one of the questions you’re trying to figure out is are all of my arrows aligned? Is everything that I want to be doing moving in the right direction or am I scattered all over the place?

Brian: Well, we use the term messy middle because, and I like to give a little explanation, this sounds like a country song because the days are long because of all the chaos you’re dealing with, but I promise you the years are short and you’re trying to figure out not only are you short on time, but you’re short on resources because man oh man is the mortgage, the kids, everything is just pulling at you. You really are feeling like you’re going in all directions. So, you have to kind of, this is why you have to prioritize. Are we focusing our resources on the right thing?

Brian: And you have to make sure that you’re not falling prey to the other things that your peers do like trying to keep up with the Joneses or like lifestyle creep. So in your 30s, what are the areas you should be focusing on when you think about building your financial plan? Well, we want you thinking about estate planning. We also want you to continue to think about risk management. Investments are still going to be a big piece of this. And then even the tax planning, the way you think about your tax return will likely change as you enter into this season.

Bo: When we were writing this show, it’s easy every decade to just list all six and go, but then we’d have this forever show. So, for us to actually put four things for the 30s just shows you this is a very busy decade.

Estate Planning in Your 30s (13:33)

Brian: So, let’s hit a few of these on the estate planning. I’ll just say what nobody wants to talk about. Guys, if you got kids, you got to have a will in place because if you think it’s hard to talk to your spouse about what happens if y’all both died at the same time because it’s going to be weird about her sister or your brother who you want to raise the kids, guys, think about if you’re not here to be in the middle of that. So, y’all get together, have those conversations. You need a will if you have children. I didn’t misspeak when I said that.

Bo: Yeah, it’s a pretty sobering stat that right now 24% of Americans said they had a will in 2025. That leaves 76%, three out of four people do not have a will. Three out of four people don’t have something that says if something happens to me, if something happens to my spouse, this is what I want to happen to the kids and this is who we want to manage the money. And these are difficult conversations and if you think they’re hard for you to have, imagine how much harder they are to have if you’re not here. So, make sure that you have that in place. And then one of the easy things that you can do from an estate planning standpoint is just make sure that your beneficiaries are updated as you get married, as you have kids, as your life circumstances change. It’s really, really easy. On your 401(k)s, on your IRAs, on your life insurance, make sure that the beneficiary you want listed is the actual beneficiary that’s listed on those accounts.

Brian: And then, I alluded to this earlier, have those hard conversations. You know, guardianship is what I was talking about with you have to tell what happens to the kids if you’re not here. Executors, who’s going to actually handle things if you’re not here? Trustees, a lot of you, you’re going to find out, especially you financial mutants, you’re going to need to want to have trusts in your estate documents that come to life if you’re not here to make your wishes known. You’re going to need to know who’s in charge of that when you’re not here. And by the way, don’t let it be a surprise that if you died prematurely, they find out, “Oh my gosh, I’m a trustee or an executor.” This is not like winning the lottery. You need to involve these people to make sure they’re even willing to serve you just in case.

Risk Management in Your 30s (15:35)

Bo: When it comes to your 30s, your risk management and the way you think about protecting yourself also changes because likely it’s not just you that you need to protect. In your 20s, we wanted you to focus on health insurance and property insurance. But now in your 30s, it’s likely that other people are depending on you. So, we want to make sure that if you have people that are depending on your income or your ability to provide resources, you carry adequate insurance, whether that be life insurance to ensure against premature death or disability insurance to protect you and your loved ones in the event that you were to become disabled.

Brian: Yeah. And don’t get scared when you see us say you need to have life and disability insurance. I was talking to a neighbor in their 30s last night. I found out they had all these whole life policies and all these other things. Look, you got a lot of things in the messy middle pulling at you. We love term life insurance. I think when you go do research because remember, you’re trying to protect your family members if you prematurely leave while they’re counting on your income. Term insurance gives you a lot of bang for the buck for a set period of time that hopefully in the background you’re building wealth so that when that term period, that 20 years, 30 years goes away, hopefully at that time you can self-insure because you’ve built your own wealth in the background.

Bo: We also want you at this stage to have a fully funded emergency fund. In your 20s, it was aspirational. Hey, we want you to shoot for having three to six months of living expenses in liquid cash. In your 30s, this becomes a non-negotiable because this is the time of life where if the messy middle causes you to become derailed, it can have devastating consequences, not just for you, but also for your loved ones. So, make sure that you have a fully funded and adequate six month or three month of living expenses emergency fund in place during this decade.

Brian: And then we put on another one here is umbrella insurance. You know, this is simple and it’s so cheap. If you talk to your property and casualty agent, this just protects you in case you need some additional coverage. I still have the story of the child who got off the school bus, threw a rock, hit another student, and it got, it was really ugly, and it was just a stupid mistake that a kid made. It was the umbrella insurance that stepped in and saved the day. So, if you’re ever worried about, do I have enough liability protection and other things for my car, for my homeowner, you might want to consider umbrella insurance.

Investment and Tax Planning in Your 30s (17:51)

Bo: From an investment planning standpoint, not a whole lot changes in your 30s from your 20s, other than the burden of making sure you’re doing it right. We said again, 25% was what we want you shooting for in your 20s. In your 30s, it does become a non-negotiable because in your 30s, if you’ve not started building, if you’ve not started saving up, this is your last chance where you can have a quote unquote normal savings rate and still reach a normal retirement. Anytime past this, you’re going to have to make some more aggressive decisions to be able to hit your long-term financial goals.

Brian: Yeah. And this is one, you know, look, we liked index target retirement funds in the beginning of your journey because they were so simple. You just basically said, “How much can I save and when do I need it?” It does the rest of the heavy lift. It will be, if you’re a financial mutant and you started in your 20s, by the time you get in your late 30s, you’re like, “Wow, I have reached multiple six figures here. Maybe I ought to be a little more tax strategic with how I’m managing this money.” There’s a good chance you’re graduating past target date funds at that point.

Bo: And then the other thing is we don’t want you to lose focus of the most important thing. Now, in your 30s, if you were saving through your 20s, the rate of return is starting to have a decent impact. Your pot of money making 8, 9, 10% can be material, but don’t lose the plot. Even at this stage, your savings rate is exponentially more important than your rate of return. So, make sure that your savings rate is keeping up with both your lifestyle and your income and your future self will thank you.

Brian: Let’s talk about tax planning. This is another very important part of financial planning is that in your early 20s, the Roth tax-free growth probably was spectacular for you. It was an easy choice. But in your 30s, you start making higher income. Your tax rates start going higher and higher. There’s a good chance you might want to play a tax arbitrage game where you take the deduction now and then hopefully have opportunities to do Roth conversions in the future. If you’re trying to figure out am I a Roth person, am I traditional, we have a great resource driven by the tax efficiency on how much you make on what you should choose.

Bo: Yeah. If you are someone who’s in a lower tax bracket, you add up your marginal federal, marginal state and it’s below 25%, there’s a really good chance that Roth makes sense for you. If you add up your marginal federal rate and your marginal state rate and it’s above 30%, then you might want to consider pre-tax because the current year tax savings is so valuable. If you’re between 25 and 30%, it becomes a little more nuanced based on your age, your account structure, and your financial goals. You should reassess this annually to make sure that your money is going into the right and most efficient pot for you.

Brian: So, a lot of you are like, “What did they just say?” This is why it’s okay that your life that you chose simplicity starts getting complex because of your success. Consider hiring a professional even on the tax planning side. And I think that can go a long way.

Bo: Well, I just think it’s so easy to make mistakes on your tax return to think, “Oh, well, I used to do this on TurboTax on April 14th. Why can’t I still do it that way?” And perhaps you can, but as complexity finds you, man, is it nice to have that second set of eyes, that other person who can step in and make sure that you’re filing things and completing things the way that they’re supposed to be done. And if you have a really good tax preparer, they will also likely bring to light things you didn’t know that you should be doing that could make your tax life a little more efficient.

Your 40s – Top of the Mountain (21:12)

Brian: Bo, this one, sadly, you’re closer to this than I am now at this point. Let’s talk about the 40s, top of the mountain. This is one where I think you’re either going to celebrate your past successes and what you’ve done right or you might have a lot of regrets in this decade.

Bo: Yeah, it’s a bit of a fork in the road. There’s going to be either positives or there’s going to be negatives and you might be getting sentimental and you might be thinking about all the things that you’ve learned and all the wisdom you can’t wait to share or you might be thinking about, holy cow, did I make a mistake with my job? Is it not actually a career? How’s my marriage going? Where are my kids? And so there are some things that you’re going to have to be thinking about in your 40s. And it’s really more of a mental exercise than anything else. So when we think about the focus areas from building a financial plan in your 40s, we’re likely going to think about two that are going to get the most attention. And it’s likely going to be tax planning, which is still going to be a big idea, same as it was in the 30s. But now retirement, which used to be a far off goal, is now getting closer and closer and closer.

Tax Planning in Your 40s (22:16)

Brian: Yeah. Let’s talk about the tax planning first. This is where, guys, I just kind of alluded to this even when we were closing out the 30s is that you tried to create this simple financial life to create success. But that success that you’ve been chasing as you’re getting closer and closer to it, man oh man, is your life getting complex. And you start thinking about, man, I need to be confident in my tax returns because look, as my returns are more complicated, remember, you always should be scared of the IRS. You don’t pay your power bill, the worst thing that happens is they just cut your power off. If you don’t pay your taxes, they can literally lock you up. I mean, the federal government has access to guns. They have access to control your will and if you make bad decisions, act accordingly. That’s why I’m very honest and I always tell people be careful when you’re making assertions on your tax planning. Don’t make mistakes with your tax returns because there can be lots of consequences from it.

Bo: Another thing in your 40s, you know, often we think about how much taxes I’m paying this year, how do I minimize this year’s tax bill? But now that retirement is becoming closer, more near to you, one of the things we want you thinking about is are you actually building your three buckets the right way? When it comes to building assets and building a portfolio, we generally have three distinct tax buckets. We have our pre-tax bucket, which is our employer sponsored plans on the 401(k), 403(b), 457 side, traditional IRAs. We have our tax-free bucket, that’s anything with Roth on it. That’s HSAs. And then we have our after tax bucket. Well, depending on when you actually plan on exiting the workforce, when you actually plan on using these dollars will affect how you build these buckets. So, if you’ve not begun thinking about this by your 40s, we want you to spend some time because it can make a real difference in how you access these dollars in financial independence.

Brian: Well, it’s also because in your 40s, you’re likely in step seven of the Financial Order of Operations. Look, if you take an active role, just don’t let the tax tail wag the entire dog because we see people all of a sudden they become 7 figure tax-deferred millionaires. And that sounds great on paper until you realize, holy cow, I’ve got to actually use this money at some point. And we actually recently, you know, if you think about planning for Roth conversions, we’ve done enough Making a Millionaires where we’ve shown people you are not just on a passive role through your financial life. The choices you make and the timing of when you do things can have a huge, I’m talking 7 figure impact on what turns out in your financial life.

Bo: Yeah, that’s exactly what was true for Robert and Carrie. We did an episode with them. The name of the episode is van life millionaires are leaving millions on the table. And what we showed them is that they had built up a really respectable, really healthy pot of assets and they were going to be able to retire and be financially independent. But when we actually forecasted their income tax situation out into retirement once they hit required minimum distribution age at 75, a tax bomb blew up on them when they were so used to being in the 12% marginal tax bracket. Now all of a sudden they blow up into the 32% marginal tax bracket later on in life. And so we said, “Hey, do you recognize that if we do a little bit of planning and we start shifting some of that tax focus now, we could potentially do Roth conversions now that you’re retired between now and the time that you’re at RMD age and we could save you from ever crossing into that 30 plus percent tax bracket.” And if we did that, there’s a good chance that you would actually end up with almost $3.5 million more in assets and you would pay almost $1.3 million less in taxes just by thinking through how to do this in those years from retirement and financial independence out until you get to RMD age. Small thoughts or what seem like small thoughts when it comes to tax planning can have huge impacts on the economic viability of your plan.

Brian: So that’s definitely powerful, but a lot of our audience is saying, “Yeah, but I’m not at that stage yet where I need to be thinking about Roth conversions.” That doesn’t mean you shouldn’t think about at least tax loss harvesting, understanding what that is as you’re on your journey. And because by the way, we seem to, we have a lot of geopolitical chaos in the world right now. We also have markets hitting all-time highs, but then additional volatility because of the things that are just going on in the world. If you don’t understand that, hey, you once again can take an active role and when the markets are going down or you’ve created losses, you have losses on your portfolio, you don’t have to just sit there and just hope and use hope as the component that they’re going to come back. You can actually use it as a powerful tool to lock in losses to help you prepare and propel your assets as they grow and recover that you can actually use those losses to kind of game the tax system in a legal way.

Retirement Planning in Your 40s (27:06)

Bo: I love it. And then we already mentioned this, but as you get into your 40s, retirement is on the near horizon. And so one of the things we want you thinking through is, man, do I need to start hyper saving if I’m behind? We know that the wealth multiplier will suggest that for a 40-year-old, $1 still has the ability to turn into $7 by the time you retire. So, you still have some juice in your dollars. But how can you know if you are ahead of the curve, on the curve, behind the curve if you’ve not actually spot checked where you are? Am I in the place that I need to be? And do I know what is going to be available to me? How much money am I going to have when I get to retirement based on my savings rate? How am I going to be able to access that money? Am I going to have other sources of income like Social Security or those sorts of things? Do I need to begin pulling some levers? I need to figure out how do I increase my income or how do I decrease my expenses? If you’ve not done this work in your 40s, you’re not going to know how comfortable or uncomfortable you should be feeling as you get into your 50s and 60s.

Brian: And at least look, we tried to help you. The easy answer is make sure you follow the FOO, the FOO, because it’s FOOish is definitely foolish. I screwed that joke all the way up. But it’s definitely, by the way I’ll go and add another one. You know what happens if you do the FOO out of order? What happens Brian? OOF. So okay, there’s all the dad jokes of this thing. But in reality, seriously, be empowered to know what to do with your next dollar. And this is also one of those things where I always point to the fact that we can lay out the groundwork on what to do with your next dollar, but this stuff really does start getting complex because more than likely in your 40s, you’re now at the stage because we know the typical millionaire crosses that threshold somewhere between ages 47 to 49 and it’s going to be a lot of their retirement accounts. They’re going to have Roth. They’re going to have taxable accounts. You’re going to try to start figuring out how do I navigate this and you just don’t know what you don’t know. It’s okay if you want to talk to a professional so you just don’t get screwed up because you’ve never done this before because hopefully if you hire the right team, they’ve done this hundreds if not thousands of times and they can help you navigate these complicated decisions.

Bo: And look, this isn’t a scare tactic, but one of the things that can happen and we’ve seen this happen is that if you don’t have someone in your corner, if you don’t have someone to kind of bounce the ideas off of, it becomes very easy to outsmart yourself. Oh, okay. Well, I was doing this index fund thing and I was saving and investing and building, but man, now that I have seven figures, now that I’m an accredited investor, okay, well, now I got to start the private placements or now I need to expand my real estate portfolio. Now I need to fill in the blank of the over complicated perhaps unnecessary thing that you think that you need to be doing. If you can have that professional, that fiduciary in your corner, it will likely protect you from falling into some of the traps that other folks in this season and stage of life often fall into.

Brian: We gave a few examples, but I think about like the VOO for life. You know, you’ve probably, based upon what’s happened over the last 10 to 15 years, you’ve been incredibly successful, but now you’re trying to figure out, well, how do I get out of this conveyor belt of goodness that I’ve been in, but still land the plane into my retirement? I think about the people who reach success and they think the sexy sizzle is the dumb doctor deal. You know, go get into some sophisticated, this is what rich people are supposed to do. And then I even get into the standpoint that everybody who’s done everything just right, you just don’t know what you don’t know. And it’s okay to ask for help. I know that’s not our human nature is that we all think that we can be confident we can do this. Protect yourself so that you can make sure that you live your best life and own your time that much sooner.

Your 50s and Beyond (30:46)

Bo: So now as we get into the 50s and beyond, Brian, we said that the 40s are sort of this fork in a road moment. Is it like positives that we’re reflecting on? Is it negatives? I think what happens in the 50s is that even gets amped up even higher. Now it becomes, okay, am I celebrating, good job, life well-lived, or am I panicking? Holy cow, I have kicked the can down the road and now I have to answer for it. And I think a lot of people in your 50s is where that really begins to take shape.

Brian: Yeah, I definitely, if you’re thinking about celebrate or panic, I want you to make the most of each of your decades and have memory building as I talked about earlier, bedazzling your basic life. But this is the time where there’s still some key areas we need to cover. We need to talk about estate planning and what’s your legacy going to be and retirement planning. Just kind of making sure that you’ve crossed the t’s, dotted the i’s, and you’re exactly where you’re supposed to be.

Estate Planning in Your 50s (31:38)

Bo: Yeah. When it comes to estate planning, odds are that if you did what you were supposed to do and got wills and those sorts of things early on in life, it was when your financial life looked a lot different. There were probably less zeros in your portfolio and less human beings or certainly much younger human beings that you were trying to plan for. Now, as you get into your 50s and beyond, you’re in this next season of life. The documents that made sense for you back then are likely not going to be the same documents that make sense for you now. So, make sure that you are updating your wills, your trusts, your power of attorneys, your healthcare directives so that your loved ones know exactly what your wishes are as you continue to move along in your financial journey.

Brian: Well, I mean, as part of that, consider your legacy. You’re trying to figure out, okay, I don’t want to just do it all when I’m dead. You know, wouldn’t it be nice if I can help the kids out now? How should I structure the assets? As I’ve shared earlier, having a child that’s special needs, there’s different things written in the tax policy that IRA beneficiaries, specifically Roth IRAs, can have some additional stretch options. So, you need to understand what your legacy and what your assets, how those things can intersect so you can structure and build it the right way. And this is also still a lot of complicated decisions that not only are going to have financial implications, but also relationship stuff. And that’s why we’ve created the estate planning ultimate guide so you can kind of start navigating these things right now to know what are my wishes. How do I know that I’m building the right structure that represents what I really want to happen to this wealth that I built over these decades?

Bo: Yeah, this is a resource. This is a hub on the website that we’ve poured a ton of time, effort, and attention to. You can go to moneyguy.com/guide/estate-planning or you can just go to moneyguy.com and type in estate planning and this will pop right up and it kind of walks you through, okay, what is estate planning, based on my season and stage what should I be thinking about, what are some deliverables that will be healthy because we don’t want you to ignore it just because it’s complicated. Just because it might be difficult doesn’t mean that it doesn’t require your attention. We’ve tried to put resources out there to make it as easy and as helpful as possible. If this is not something you’ve put any attention to yet, it’s certainly something you should likely be thinking about now.

Retirement Planning in Your 50s (33:53)

Brian: And then this is a big one, retirement planning. We want you to actually check and stress test your retirement plan because this is one, guys, where once you leave the workforce, cross that threshold, it’s kind of hard to go back. So we definitely want to measure twice, cut once. So don’t sleep on that. I mean, even in today’s, we did a Q&A show, there was a 65-year-old who was getting into thinking about doing day trading. This is the type of stuff you need somebody to kind of help you figure this stuff out.

Bo: Yeah. We want you also thinking through, you know, does the investment strategy that I had in my 20s, 30s, and 40s still match where I am today? And that’s likely not the case. We want you now checking, okay, am I well diversified? What does my asset allocation look like? And what does my asset location look like? Have I adjusted how much cash that I have to account for this new season or new stage phase of life that I’m moving into? We want to make sure that you’ve thought through your portfolio risk based on the portfolio that I have in place. Does it match not just my risk tolerance? How much can I handle? But does it also match my risk capacity? How much risk should I be taking on so that my plan does not blow up? You want to begin making those decisions in your 50s, in your 60s as you’re leading up to financial independence. What you don’t want to do is get into your 70s, hit that downturn, hit that 2008, hit that 2022 and say, “Oh no, I did not have the right plan in place.”

Conclusion – Bringing It All Together (35:25)

Brian: All this leads to all roads lead to complexity due to success. It’s okay to bring on a professional. You know, that’s the thing is that I think about, you know, what’s funny is this is probably a few months ago. I had a client, they’ve been with me for quite a while and they’re like, “Brian, I don’t know, you know, I’m worried about fees and expenses.” Because he had some things going on in his job. And he’s like, “Maybe I can just manage this.” And I was like, “Wait a minute. You have been with me for the last two decades. Now, as we’re about to start doing the Social Security planning, the stress testing, the plan, the IRMAA, all those type of things, and you know, the Roth conversion strategies, this is when you think that you can do it on your own.” No. Look, it’s very easy in the beginning of your journey. That’s why we create so much free content is that I want you if you’re in your 20s, 30s, and even early 40s and you’re trying to just get motivated and you want to make sure you’re making the right decisions, just go to moneyguy.com/resources. But I know for a fact that if you have built success, the complexity comes from that. We add value on that. And that’s why I love that we get to do Making a Millionaire. That’s why we’ve been creating content since 2006 is because we know that there’s a better way to do money. And I want to invite you, we’ll leave the porch light on for you. Go look at our become a client page because we can help you answer these questions so you don’t have to have doubts. You don’t have to have fear in retirement. You can live your best life and own your time that much sooner. I’m your host Brian, joined by Mr. Bo. Money Guy team, out.