Power Up Wealth podcast – Episode 111 – Navigating Your 20s to 60s: Timeless Financial Advice
James Derrick 0:00
Securing your financial future is different for everyone. I’m James Derrick, President of Smedley Financial. Today, Amy Hansen will be sharing advice to help people of different ages make sure their financial future is on the right track.
Shane Thomas 0:16
Welcome to the SFS Power Up Wealth podcast, where we provide impactful insight and expert opinions on timeless financial principles and timely investment topics, preparing you to make smarter decisions with your money.
James Derrick 0:33
Amy, thank you for joining me today.
Amy Hansen 0:35
Thank you for having me. I’m so excited to be here.
James Derrick 0:37
Amy Hansen is a licensed representative and a paraplanner at Smedley Financial Services. Amy, since this is your first time on the podcast, why don’t you tell everyone a little bit about yourself?
Amy Hansen 0:48
Sure. So personally, I have four kids, elementary to high school. They take up a lot of my time right now. I love to be outdoors, I love to play music, and I love to write piano music. On the professional front, I’ve worked in accounting and finance my entire adult career. I graduated from the University of Utah in accounting, and my previous position to this was financial advisor as well, but I worked with firms and government, so this has been a fun shift to work with individuals.
James Derrick 1:22
And you recently wrote an article all about helping individuals by decade. Let’s run through that a little bit. Let’s talk about the roaring 20s.
Amy Hansen 1:30
Okay, so this was a fun article to write because it’s like physical health. You can’t work with financial health all in one moment. You just can’t ignore it, and then all of a sudden, make it happen. So in your 20s, what you want to focus on primarily is the fact that you have a lot of time on your hands. So you’re not going to retire for a long time. So if you start investing, you open those accounts, you start putting money away. Don’t outlive your means. Make sure you have a profession that will earn you money. It’s just you have time, but also don’t waste it.
James Derrick 2:01
What advice do you give to people about debt in their 20s? Because it’s very different from when they get older?
Amy Hansen 2:08
Sure, so I actually have debt in the article in the 30s to really tackle it, but I think it’s important to think about in your 20s that you don’t want to get buried, because anything you do in your 20s you’re going to have to undo, right? You’re going to have to pay that off. So can you avoid student debt? Can you not purchase your Ferrari in the 20s? Can you, you know, don’t put money on your credit card. If you don’t have the money, don’t spend it. Start to develop those financial habits. Debt is something that can be avoided most of the time. I realized sometimes there are things you have to, you know, student loans, for example, if you want to do a certain profession, like become a lawyer, you have to have student loans most of the time. Most people don’t have the money to pay for that. But be wise about it. Know that you’re going to have to pay those off and make a plan to do that as soon as possible.
James Derrick 2:57
Let’s jump to the 30s now.
Amy Hansen 2:59
Okay, so I was going to touch on debt in the 30s. So the fun thing about the 30s is you’re kind of establishing yourself. You’re not in your 20s anymore. A lot of people have their education behind them. A lot of people are into their career. They’re into their families. They’re really starting to hit the ground running. So in your 30s, you want to be on track. You want to make sure that you are getting rid of the debt that you don’t need. So most people don’t pay off their houses if they if they choose to buy a house, they don’t pay it off in their 30s. But you can pay off credit card debt. You can stop paying interest, and you can start earning it. So focus on making sure those accounts that you set up in your 20s are rolling. Make sure you’re earning interest on those. This is a great time to make sure you’re headed in the right way. Don’t be paying interest if you can avoid it. Try to avoid it as much as you can, and start earning that interest on those retirement accounts.
James Derrick 3:51
Excellent advice. What about buying a home versus renting?
Amy Hansen 3:54
Buying versus renting? This, I would say, 10 years ago, everyone was said to buy, right, and now, because of home prices, really laying them out. Sometimes it’s better to rent. It really depends on your financial situation, the interest rate, how much money you can put down, all these different things. Where you live. That is something to look into the numbers. You can talk to a financial advisor, you could talk to possibly a realtor, and see what will put you ahead. Sometimes the cost of interest on a mortgage will be higher than rent. You know, the cost of rent. So it will actually put you behind for retirement. That is something to dive deeper into. It’s probably out of the scope of this podcast, but it is something to think about that it’s not always beneficial to buy while the interest rates and the home costs are so high like they are right now,
James Derrick 4:44
Yeah, there’ll be opportunity if those come down for sure.
Amy Hansen 4:47
Right?
James Derrick 4:48
Let’s talk about the 40s, and you use the word powerhouse. Why? Why are the 40s a powerhouse?
Amy Hansen 4:54
I said that because I feel like, maybe it’s because I’m that old and I feel like I have to say that, or else I’ll cry, because there are so many things happening in your 40s. So your career is moving. Your family is taking up a ton of time. A lot of people have obligations outside of that that are in the community. Are you involved in neighborhood stuff? Are you involved in local government? Are you involved in church stuff? All of that is pulling your time, and they’re all great things. We don’t have a ton of time to put toward our constantly thinking about our finances, and nor do we want to. We want to enjoy our families. We want to enjoy the life that we’ve been building up. At this age I suggested a few different things. Make sure you’re on track. This is a great time to set up a meeting with an expert like a financial advisor, and just say this, these are the accounts I have open. This is where I want to be. Am I on track? Check out your debt again. If you know, if you have soaring debt, take care of that. I would just say, talk to an expert and see if you are on track. That would be my biggest advice for 40s.
James Derrick 5:57
Tell us a little bit about beneficiary designations, Wills, Trusts.
Amy Hansen 6:02
So I included that in the 40s as well, because, I mean, most of us are going to live well past our 40s, but you never know, and it’s good to have things in place. You want all your assets to be taken care of. You don’t want things to go through probate if something, heaven forbid, should happen to you. So this is a great time to talk to your attorney, talk to a financial advisor, get these things in place. Beneficiaries are like your children or someone that you want to leave your assets to. It’s better that you decide, as opposed to, you know, a judge.
James Derrick 6:31
Let’s talk about the big decisions of your 50s.
Amy Hansen 6:34
So I said big decisions because you are staring retirement in the near future. It’s not too distant. You can see it. A lot of people know in their 50s when they will be able to retire, or when they want to retire. So you have to decide things like, are my accounts on on track to have enough to retire? Can I do catch up contributions? At this age the government allows you to add more to your retirement accounts. So can you max those out? What can you contribute? Are you planning to retire, you know, in the late 50s or early 60s, and then when are you going to start taking Social Security? It happens for most people in their 60s, later, but you want to kind of decide when you want to start taking that. Also, if you are going to retire, what does your health care look like? So there’s a lot of things you have to decide in your 50s to have a smooth retirement in the next decade.
James Derrick 7:26
Suddenly, retirement doesn’t feel that far off.
Amy Hansen 7:28
It doesn’t feel that far off.
James Derrick 7:30
What about eliminating debts? At what age would you say people need to get out of all debt?
Amy Hansen 7:38
If you retire you’re on more of a fixed income. So if you have X amount to live on, and you have a house debt, let’s say it’s going to just knock out a big chunk of your lifestyle. It’s a great plan, if possible, to get rid of that debt before you retire. So look at your look at how much you owe on your mortgage. Look at your financial situation, talk to your financial expert that you use, and see how you can maximize your fixed income, because a fixed income is going to be knocked down by a fixed payment, like a mortgage payment, which is not ideal.
James Derrick 8:15
Let’s move to the 60s and beyond
Amy Hansen 8:17
And beyond. Yes, it doesn’t end in the 60s.
James Derrick 8:20
According to you, they are going to be glorias.
Amy Hansen 8:22
They’re going to be amazing. That’s the goal, right? So all this preparation that we’ve spoken about is so you can have a glorious 60s and beyond. So the preparation has hopefully been done. There’s not as much that you can do at that point. Your accounts have they been saved for? Have you organized it? You can still set up like wills, trust beneficiaries, you can still talk to a financial advisor. The thing about the 60s is most people have three great things. If you retire, you have time. A lot of them still have their health, and they have money because they’ve been saving. So it’s a great time to just really enjoy. You do need to figure out your Social Security and how much you can, you know, take versus how much you want to take, if you delay it, you get a little more. So there are some, some decisions like that, but most the time, you’ve set yourself up and you can just enjoy your retirement.
James Derrick 9:09
Yeah, some of those decisions like Social Security, I mean, they’re set in stone once you make them.
Amy Hansen 9:13
Once you make them.
James Derrick 9:14
You want to get them right.
Amy Hansen 9:15
Right. Get them right. No pressure, but yes, get them right.
James Derrick 9:19
And you talk about outliving your assets. This has got to be a fear for many people.
Amy Hansen 9:24
Yes, actually, that is the greatest fear for people of this age. You hit a certain age, you have a certain amount of money. You want to make sure that you’re organized in such a way that you know how much you have available every month. And we never know how long we’re going to live, but you want to be prepared to live that if you did live a long life, that you have enough money. To do that you need a plan. Talk to someone who can lay it out for you and be like, This is what you have. This is how much inflation is going to hit you. This is how much social security you’re bringing in. This is how much you’re currently spending. So put all these factors. Together and choose how much you really will need and how the kind of lifestyle you can live to make sure your assets last as long as you do.
James Derrick 10:08
And who knows, if you have done a good job saving or earning and saving, then you may actually be able to spend more than you think.
Amy Hansen 10:16
Right, which is often the case. These savers, these savers are so great, they get in the habit of saving, they have a hard time spending it. I find that that happens more. So it is good to once you hit that age, spend what you’ve earned, spend what you’ve planned, and just make sure you know what your know what your number is, and then just stick with it and enjoy your retirement.
James Derrick 10:34
Well, thank you, Amy, for coming in to share with us. There are clearly some big opportunities at every age to make the most and plan for the future.
Amy Hansen 10:43
Yes, thanks, James,
Shane Thomas 10:44
Thank you for joining the Power Up Wealth podcast. Smedley Financial is located at 102 S 200 E Ste 100 in Salt Lake City, UT 84111. Call us today at 800-748-4788. You can also find us on the web at Smedleyfinancial.com, Facebook, Instagram, Twitter, and LinkedIn. The views expressed are Smedley Financials and should not be construed directly or indirectly as an offer to buy or sell any securities or services mentioned herein. Investing is subject to risks, including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should only be relied upon when coordinated with individual professional advice. Securities offered through Osaic Wealth, Inc., member FINRA/SIPC. Investment advisory services offered through Smedley Financial Services, Inc.® Osaic Wealth is separately owned, and other entities and/or marketing names, products, or services referenced here are independent of Osaic Wealth.
Financial Answers By Decade — Amy Hansen
