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W e’ve all heard the saying “with age comes wisdom”, but this may not always be true in when it comes to your finances. As you move through different life stages, there are new opportunities--and potential pitfalls--around every corner. Financial Mistakes at Different Ages The 20 Somethings Not being financially literate.  Many students graduate from high school or col- lege without knowing the basics of money man- agement. Learn as much as you can about saving, budgeting, and investing now so you can benefit from it for the rest of your life. Living beyond your means.  It’s tempting to want all the latest and greatest in gadgets, entertainment, and travel, but if you can’t pay for most of your wants up front, then you need to rein in your lifestyle. If you take on too much debt it can hold you back financially for a long, long time. Not saving for retirement.  So you wonder “I’ve got time…what’s the rush?” Well, if you put that time to work for you and start saving some of your earnings now, your 67-year- old self will thank you. By Daniel T. Newquist, CFP®, AIF® The 30 Somethings Being house poor.  Dan Newquist, CFP®, AIF®, Principal & Senior Wealth Advisor with RNP Advisory Services, Inc., a registered investment advisor, Morgan Hill. He can be reached at 408-779-0699 or dnewquist@ Securities offered through Foothill Securities, Inc., member FINRA/SIPC, an unaffiliated company. Whether you’re buying your first home or trading up, don’t buy a house that you can’t afford, even if the bank says you can. Build in some wiggle room for a possible dip in household income that could result from job change, going back to school, or leaving the workforce to raise a family. Not protecting yourself with life and disability insurance.  What would happen if one day you were unable to work and earn income? Though the cost and avail- ability of life insurance depend on several factors including your health, the younger you are when you buy insurance, the lower your premiums will likely be. Not saving for retirement.  Okay, so your 20s passed by in a blur and retire- ment wasn’t even on your radar. Now that you’re in your 30s, it’s critical to start saving for retirement. Wait much longer, and it can be hard to catch up. GILROY • MORGAN HILL • SAN MARTIN The 40 Somethings Trying to keep up with the Joneses.  Appearances can be deceptive. The nice homes, cars, vacations, and “stuff ” that others have might make you wonder if you should be buying these things, too. But behind the scenes, your neighbors could be taking on a lot of debt. Take pride in your savings account instead. Funding college over retirement.   In your 40s, saving for your children’s college costs over your own retirement could be a mistake. If you have limited funds, set aside a portion for col- lege but earmark the majority for retirement. Then sit down with your teenager and have a discussion about academic options that won’t break the bank-- for either of you. Not having a will or an advance medical directive.  No one likes to think about death or catastrophic injury, but these documents can help your loved ones immensely if something unexpected should happen to you. The 50 and 60 Somethings Co-signing loans for adult children.  Co-signing means you’re on the hook--completely- -if your child can’t pay, a situation you don’t want to find yourself in as you’re getting ready to retire. Raiding your home equity or retirement funds.  It goes without saying that doing so will prolong your debt and/or reduce your nest egg. Not quantifying your retirement income.  As you approach retirement, you should know how much you can expect from Social Security (at age 62, at your full retirement age, and at age 70), pen- sion income, and your pe rsonal retirement savings. Not understanding health-care costs in retirement.  Before you turn age 65, review what Medicare does and doesn’t cover, and how gap insurance policies fit into the picture. As you are faced with decisions about your finances at various stages in your life, be sure to consult with your financial advisor, especially as major events (e.g., marriage, divorce, birth of a child, prolonged illness, and job change) occur. Meeting consistently with your advisor will help keep you on track toward your financial goals and retirement objectives. SEPTEMBER/OCTOBER 2015 77