Reaching your mid-40s is a significant milestone, often marked by reflections on personal and professional achievements. At this stage, it's crucial to evaluate your financial health to ensure you're on the right path toward a secure retirement.
If you haven't assessed your financial situation yet, now is the perfect opportunity. Retirement may be just around the corner, and being prepared is key to enjoying your golden years without financial stress.
Here are a few signs you’re doing well financially when you’re over 45.
Steal this billionaire wealth-building technique
The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.
A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.
If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds,see what Masterworks has on offer. (Hurry, they often sell out!)
Your emergency fund can last at least six months
Having an emergency fund that can cover at least six months’ worth of expenses is a clear indicator of financial stability. This fund acts as a buffer against life's unexpected events, such as medical emergencies, job loss, or major home repairs.
It allows you to handle unforeseen expenses without dipping into your savings or going into debt. If your emergency fund is robust and readily accessible, and you're earning more on your savings, you're well-prepared to face financial surprises.
Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.
Your 401(k) is in the six digits
A six-figure 401(k) balance is a strong sign you're on the right track for retirement. Regular contributions to your 401(k), especially if your employer offers a matching program, can significantly boost your retirement savings.
This account should be growing steadily, thanks to both your contributions and the power of compound interest. If you’ve reached a six-digit balance, you’re building a solid foundation for a comfortable retirement.
You have an IRA in addition to a 401(k)
Diversifying your retirement savings with an Individual Retirement Account (IRA) in addition to a 401(k) demonstrates proactive financial planning. IRAs offer additional tax advantages and investment options, enhancing your retirement portfolio.
Having both types of accounts indicates you're serious about maximizing your retirement savings and taking full advantage of tax-advantaged investment opportunities.
Get a free stock valued between $5 to $200
Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.
Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.
Let’s say you want to invest $250, as an example.
With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.1
Even better news? Add a Robinhood Gold membership, and you’ll get access to 5.00% APY2on your uninvested cash3and the ability to buy and sell stocks 24 hours a day, 5 days a week.
Open and fund a Robinhood account and earn up to $200 in stock
You’re maxing out retirement contributions
Maxing out your contributions to retirement accounts, such as a 401(k) and IRA, demonstrates a strong commitment to your future financial security.
The IRS sets annual limits on how much you can contribute to these accounts, and reaching those limits means you’re taking full advantage of tax-deferred growth opportunities.
For tax year 2024, individuals can contribute a maximum of $23,000 to their 401(k) and $7,000 to their IRA. Workers over age 50 may contribute an additional $7,500 to their 401(k) and an additional $1,000 to their IRA.
You’re debt-free or have a manageable level of debt
Being debt-free or having manageable debt levels is a strong indicator of financial health. This includes paying off high-interest debts like credit cards and maintaining low balances on any remaining loans.
If you've eliminated or significantly reduced your debt, you're in a better position to save and invest more of your income, further securing your financial future.
You regularly review and adjust your budget
Regularly reviewing and adjusting your budget to reflect changes in your financial situation shows that you’re actively managing your money.
This habit helps ensure you're living within your means and allows you to allocate funds toward savings, investments, and other financial goals. A well-maintained budget is a cornerstone of financial success and adaptability.
Your credit score is excellent
An excellent credit score opens doors to better interest rates on loans and credit cards, saving you money over time. It also reflects your ability to manage credit responsibly.
If your credit score is high, it indicates you have a solid history of paying bills on time, keeping debt levels low, and managing various types of credit effectively. Generally, an excellent credit score is 800 and above.
You have multiple income streams
Having multiple income streams, such as rental income, dividends, or a side business, enhances your financial stability. Diversified income sources can protect you against the loss of a primary income and provide extra funds for saving and investing.
If you have multiple income streams, you're reducing your financial risk and increasing your wealth-building potential.
You have a comprehensive insurance plan
A comprehensive insurance plan, including health, life, disability, and long-term care insurance, is essential for protecting your financial well-being. These policies safeguard you and your family against significant financial losses due to illness, injury, or death.
If you have adequate insurance coverage, you’re mitigating potential risks and ensuring unforeseen events don’t derail your financial plans.
Earn up to a $300 bonus and grow your money with up to 4.50% APY
This powerful combination checking + savings account from SoFi® allows you to earn up to a $300 bonus with direct deposit and grow your money with up to 4.50% APY.4
This is one of the top accounts we’ve seen, and offers like this can be rare. You work hard, and now it’s time to make your money work for you — with SoFi, you can grow your money with hardly any effort!
SoFi has no account or overdraft fees5 and additional FDIC insurance up to $2 million on deposits is available through a seamless network of participating banks.67 Plus, you can receive your paycheck up to 2 days early.8
How to earn up to $300: Sign up and make a direct deposit within the first 25 calendar days of the promotional period, then collect a $300 cash bonus with a direct deposit of $5,000 or more.
SoFi is a Member, FDIC. 7
Open your SoFi account and set up direct deposit
You have a diversified investment portfolio
A diversified investment portfolio that includes a mix of stocks, bonds, real estate, and other assets reduces risk and enhances potential returns.
Diversification helps protect investments from market volatility and economic downturns. By having a well-diversified portfolio, you’re managing risk effectively and positioning yourself for long-term growth.
You’re on track with your retirement goals
Regularly assessing your progress toward your retirement goals ensures you’re on the right path. This includes calculating your expected retirement expenses, estimating your future income, and adjusting your savings and investment strategies as needed.
If you’re on track to meet your retirement goals, you’re likely to enjoy a comfortable and financially secure retirement.
You have an estate plan in place
An estate plan, including a will, power of attorney, and health care directives, ensures your wishes are carried out, and your loved ones are taken care of after you’re gone. Having an estate plan in place is a sign of responsible financial planning and provides peace of mind.
You’re actively pursuing financial education
Continuing to educate yourself about personal finance, investments, and retirement planning shows you’re committed to maintaining and improving your financial health.
Staying informed about financial trends and strategies helps you make better decisions and adapt to changes in the economy and markets.
Bottom line
Assessing your financial health regularly, especially as you approach retirement age, is crucial for ensuring a secure future.
How do you measure up against these signs of financial well-being? If there are areas where you need improvement, now is the time to take action and secure your financial future.
Lucrative, Flat-Rate Cash Rewards
FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.
Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 20.24%, 25.24%, or 29.99% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
Author Details