Life Stage Planning: Aligning Investments with Your Financial Goals

As Bradley, Foster & Sargent celebrates its 30th anniversary, we remain dedicated to a holistic approach that combines expert investment management with personalized financial planning. While investment management optimizes portfolios, wealth planning ensures those investments align with your broader life goals. Here, we break down financial strategies across four key stages of life: early career, mid-career, pre-retirement, and retirement.

In your 20s and 30s, financial planning centers around building a solid foundation. This includes developing a habit of saving, paying off student loans, creating an emergency fund, and saving for milestones like buying a home. Investments should reflect your short-term goals by being low-risk and liquid, while long-term objectives, such as retirement, benefit from a growth orientation in tax-advantaged vehicles like 401(k)s and IRAs.

Key Focus Areas:

• Debt management: Prioritize paying down high-interest debt.
• Emergency savings: Build a safety net.
• Goal-specific saving: Use low-risk investments for near-term needs like a house down payment.
• Risk Management: Determine the appropriate level of coverage for life insurance and long-term disability insurance. Consider funding a health savings account (HSA) to cover medical expenses.

In your 40s and 50s, as income grows, you can focus more on maximizing savings for retirement and future expenses, such as your children’s education. Diversify your investment portfolio to balance risk and investment return while considering tax-efficient strategies, like contributing to 529 plans for education or increasing contributions to Pre-Tax or Roth accounts. It’s also a good time to reassess your insurance needs to protect your financial future.

Key Focus Areas:

• Education planning: Explore 529 savings plans.
• Retirement savings: Reevaluate pre-tax and Roth options.
• Diversification: Ensure a balance across different asset classes.
• Risk Management: Reassess insurance coverage amounts.

As you approach retirement, typically in your 50s and early 60s, it’s essential to plan how you will generate income from your investments. Start developing a withdrawal strategy for your various accounts and consider whether Roth conversions make sense to reduce future tax burdens. It’s also important to ensure your portfolio can last through a potentially long retirement, balancing growth with risk management.

Key Focus Areas:

• Withdrawal planning: Develop tax-efficient strategies for withdrawing from different accounts.
• Longevity planning: Ensure your portfolio can support your needs throughout retirement.
• Risk adjustment: Determine the appropriate asset mix to support near-term distributions while maintaining purchasing power for cash needs in the future.

In retirement, managing your assets to ensure they last is crucial. Early on, your discretionary spending on activities like travel may increase, but as you age, healthcare and long-term care costs may become a larger concern. Set a sustainable withdrawal rate, and make sure your portfolio can outpace inflation to protect your purchasing power.

Key Focus Areas:

• Sustainable withdrawals: Target an initial withdrawal rate of around 4% to preserve your portfolio. Flexibility to adjust distributions increases the odds of a successful retirement.
• Tax-Efficient Withdrawals: Determine the most tax-efficient sources for distributions
• Healthcare and long-term care: Plan for potential medical costs by growing your investment pool.
• Inflation protection: Ensure your portfolio continues to grow in real terms.

We believe that successful wealth management is about more than just investing, it’s about ensuring those investments support your life goals at every stage. Whether you’re just starting out, building your career, or enjoying retirement, personalized planning helps secure financial peace of mind for the long term.