6 tips for financial planning in your 40s

Build up your cash reserves
Build up your cash reserves © Nata-Lia/

Roy Laux, president of Synergy Financial Services in McKeesport, Pa., says the first step in any financial planning is to establish an emergency fund.

"You should have three to six months of your normal income in an account that's safe and liquid," Laux says. "You should also have in that account savings for planned expenses. For instance, if you know you need to replace your furnace in a few years, you should be setting aside money for that in your savings account."

Ronya Corey, a financial adviser with Merrill Lynch Wealth Management in Washington, D.C., says that two-income households may be safe enough with three months of expenses saved, while a single person might need six months' of reserves.

"There's no right or wrong answer about how much cash to have, but you need to be prepared in case your roof needs replacing or if you lose your job," Corey says.


Show Bankrate's community sharing policy
          Connect with us

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

Ask Dr. Don

How to cash aunt's savings bonds

Dear Senior Living Adviser, I have the power of attorney for my aunt who has dementia and lives in a memory care home. She has about $30,000 in Series EE savings bonds. She is rapidly going through her savings paying for... Read more

Partner Center

Connect with us