When you hit that mid-life mark, it’s a great opportunity to take a step back and look at your finances, and maybe even map out a plan for what’s ahead, so today we are helping you with that with 5 tips for financial planning in your 40’s.

By now, you’ve probably been in the workforce for a bit. You might own some things like a house or a car, and chances are you’ve got loans and bills to take care of too. Expenses can add up fast, especially when you have kids or older parents to look after.

It’s really important to make some savvy financial choices right now. This way, you can enjoy the rewards of your hard work today while also paving the way for a comfy retirement down the line.

Here are 5 tips for financial planning in your 40s

Make a plan

Put together a financial plan that outlines where you currently stand financially, what your goals are, and the strategies you’ll use to save and build your wealth. Writing it down really helps with sticking to it and keeping track. Make sure to check in on it often so it stays in sync with what’s going on in your life.

If you need help with his and you aren’t sure where to start, look to seek professional advice and this can be done through a financial adviser or other professionals depending on your goals.

Budget wisely

Your 40s can really come with a lot of financial responsibilities to juggle. Set up a straightforward household budget and check in on it regularly. Make sure to prioritise your spending to keep your cash flow in check, but don’t forget to treat yourself every once in a while. Building an emergency fund of about three months’ salary is a smart move. Why not kick things off with a goal of saving one month’s salary? It makes it feel more doable, and once you hit that target, you can always adjust your plan from there. Remember that checking in on the budget is the most important step in order to track your progress.

Tackle debt

It’s a good idea to tackle that high-interest debt first. Doing so can help you free up more cash for savings and investments down the line. This can really help you feel more secure about your finances and ease the stress of growing interest. Think about what debt is good(tax-deductible) and what debt is bad(non-deductible) as you want to focus on paying off your bad debt first as this provides no tax benefits.

Maximise retirement savings

If you haven’t thought about it yet, maybe look into boosting your contributions to your superannuation. Salary sacrificing might be a smart move for your taxes and could really help grow your retirement savings over time.

Compare your marginal tax rate to deductible super contributions(15%) and consider the tax savings of placing funds in super which will not only increase your nest egg in retirement with a concessionally taxed environment of 15%, but can also help fund fees, insurance premiums, adviser services costs and when you retire after the age of 60 and draw an income stream- the funds will be in a 0% tax on earnings and income environment.

Safeguard your present and future

You’ve done a great job ensuring your family is financially secure, but it’s also important to safeguard your finances against those unexpected twists life can throw your way. Life insurance offers you the comfort of knowing that if something were to happen to you, whether it’s passing away or being unable to work because of a serious illness or injury, your family would be taken care of. These policies are usually pretty flexible and can be looked at during important milestones to make sure they still fit your needs and budget. When looking at life insurance options you want to consider the following options.

1. Term Life Insurance (Death Cover)

Pays a lump sum benefit to your beneficiaries if you pass away or are diagnosed with a terminal illness during the policy term. When looking at the level of cover you may want to consider overall debt, living expenses, replacement of income, funeral expenses and education costs for children. This can be funded both inside and outside super

2. Total and Permanent Disability (TPD) Insurance

Provides a lump sum payment if you become totally and permanently disabled and are unable to work again. When looking at cover you may consider debt, medical expenses, ongoing care, or to replace lost income due to a disability. This can be funded both inside and outside super

3. Trauma Insurance (Critical Illness Cover)

Pays a lump sum if you are diagnosed with a specified critical illness (e.g., cancer, stroke, heart attack, major organ failure or loss of limbs).You may want to consider covering medical treatment costs, recovery expenses, or to reduce financial stress while focusing on recovery.

This insurance is only available outside superannuation and unfortunately for this reason, this benefit is often overlooked due to not being offered or known of and can be one of the benefits that pay straight away as there is no return back to work clause and claim is paid on meeting diagnosis.

4. Income Protection Insurance

Replaces a portion (typically up to 75%) of your income if you are unable to work due to accident, injury or illness and provides a monthly income replacement benefit until you can return back to work or up until age 65.

The purpose of this cover is to help cover ongoing living expenses, mortgage payments, or other financial commitments during periods of incapacity.

We’re here to help you put together a strong financial plan and find the best mix of life insurance products to keep it safe, so you can relax knowing your future is in good hands. If you require assistance with any of the tips and information mentioned above, please contact our Oran Park or Baulkham Hills office on (02) 9188 1547.









The information in this website and the links has been prepared for general information purposes only by our office and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax, personal or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned on this website, consult a professional financial advisor to consider whether it is suitable and appropriate for you and your personal needs and circumstances.