building“Whether you’re a millennial just out of college, a baby boomer about to retire or somewhere in the middle, it can often be difficult to know where to start when it comes to getting your finances on track,” writes Masood Vojdani in a terrific piece headlined How to Build Wealth and Financial Security. “Student loans are higher than ever, market volatility is giving investors the jitters and individuals are increasingly concerned about building an adequate nest egg as life spans increase.”

Vojdani then outlines “several key areas for individuals of various ages to focus on in order to pay down debt, accumulate wealth and position [themselves] for a secure financial future”:

“Millennials. Create a plan to pay off student loans. Act now and start paying off any student loans, starting with those that have the highest interest rate. Many recent grads mistakenly decide to defer their loans or simply ignore them for as long as possible, but they discover later that student loan debt can be a very heavy burden that prevents the achievement of other financial goals.

“Ask your employer about a 401(k) plan. Many companies offer a 401(k) plan to employees. Discuss your plan with your employer, the record-keeper or another financial professional and start putting away a percentage of each paycheck right away. If your company offers an employer match, make sure to contribute enough to receive the maximum match and accelerate your savings. If your company doesn’t offer a 401(k) plan, research other retirement savings accounts such as an IRA.

“Start thinking about your investing strategy. Once you’ve managed your debt and your basic finances are covered, think about how you want to approach your investments. If you’re comfortable with a certain level of risk, consider starting with a more aggressive asset allocation which you can gradually revise to be more conservative as you get older. To get started, speak with a financial advisor to set up a plan. If that’s too expensive, look at cheaper alternatives such as a robo-advisor.

“Generation X. Remember to focus on your own finances first. Generation X has also been called the Sandwich Generation, as many of its members are both caring for elderly parents as well as their own children. While it’s always nice to help family members if you’re able to, you must first make sure your own finances are in order – especially since your retirement years are rapidly approaching. Take a hard look at your full financial situation, including any debt, savings and retirement plans.

“Assess your personal budget plan. Individuals in this age bracket were hit hard by the Great Recession and the slow growth that followed during their prime wealth-building years. Consider re-evaluating your budget to ensure you have an emergency fund that will cover unexpected expenses and a plan to pay down consumer debt such as credit cards or auto loans.

“Monitor retirement plans and consider increasing contributions. Calculate how much you expect to need to live comfortably in your retirement years and adjust your investments or contributions accordingly, even if this means cutting back on unnecessary expenses like vacations, eating out or gifts. Now is the time to max out contributions and take advantage of employer matches.

“Baby boomers. Ensure you’re on track for a comfortable retirement. If you’re concerned about the size of your nest egg, consider deferring more to your retirement plans or making catch-up contributions. If you are 70 1/2 years of age or older, remember that you are required to make minimum withdrawals from your 401(k) and IRA. Missing these distributions can cause you to incur major penalties and taxes.

“Don’t panic in times of market volatility. Recent events have caused market swings and heightened investors’ nerves, but it is important to remember that short-term events should not affect your long-term thinking. Instead of reacting to headlines about market volatility by selling off stocks – which can result in fees and unrecoverable losses to your portfolio – focus on quality investments that will support a future of financial stability.

“Discuss estate planning with your family. Conversations about death and money are often uncomfortable, but it is imperative for individuals to have regular meetings with family members to discuss wills and other estate planning documents. Reviewing your will periodically enables you to make updates based on your assets, health and relationships with family members. It is also important that select family members have at least a general idea, if not specific details, of what assets will be coming to them.

“Accumulating wealth requires a combination of hard work and patience, but regardless of your age, it’s never too early – or late – to start protecting yourself financially and preparing for the future.”