Were you born in the 1960s, at the tail end of the baby boom?
Then maybe you're like many in your age group who are trying to juggle multiple financial goals simultaneously.
Perhaps you're seeking to buy a more commodious house while also grappling with the challenge of funding your children's college years. As if these pressures aren't enough, Lisa Hatcher, a certified financial planner, has an additional one: your retirement.
"People in their 50s are alert to the issue of retirement savings. But they're very resistant to reducing their living standards in order to save as much as they'll need," says Hatcher, who's affiliated with the Garrett Planning Network (garrettplanningnetwork.com).
She says boomers are the first generation that must worry about paying for their own retirement because many rely on largely self-funded 401(k) plans, instead of the employer-provided pensions of yore.
Despite competing financial pressures, Hatcher says many people in their 50s can still meet more than one financial goal, assuming they plan carefully.
Here are a few pointers:
-- Search for creative ways to fund college costs.
Michael Knight, another Garrett Planning Network adviser, says many of his clients are feeling a great deal of pressure to maximize savings for their kids' college expenses.
"On average, students who graduate with a bachelor's degree have $33,000 in debt, and many grad students ... come out with six-figure debt," says Mark Kantrowitz, a leading authority on funding college and the senior vice president of Edvisors. The company (edvisors.com) runs a suite of websites about planning and paying for college.
Kantrowitz urges students who've yet to enter college to take an analytical approach to school selection, making sure they get the maximum return on investment.
"For example, if you're going into engineering, you'll probably do just as well at a public university as an Ivy League," he says.
As long as they remain as objective as possible, families can often work out compromise scenarios to help reduce the parental burden of college funding.
For instance, a family could decide to divide the cost of their children's undergraduate schooling three ways: a third paid upfront by the parents; a third through the kids' part-time and summer employment; and a third with student loans.
-- Think through your financial priorities in a holistic way.
Before they begin analyzing numbers, Knight asks clients to itemize their top financial objectives. They write down their money goals for the next six months, two years, 10 years and 30 years.
"Each spouse does this exercise separately and then they do it together, which makes for very sobering conversations," Knight says.
This exercise serves to create a firm foundation for a financial "action plan" that can help people clarify their goals in an orderly way.
-- Consider engaging a financial adviser for a few hours.
An increasing number of financial planners are willing to work on an "as needed," fee-for-service basis. One source for referrals to fee-only financial planners is through the National Association of Personal Financial Advisors (www.napfa.org).
Knight says that often clients need only three to four hours of help from a financial planner to reconcile seemingly conflicting objectives.
-- Chart your housing plans in context with your other goals.
Knight encourages his clients to fulfill their home-buying wishes, but only if doing so doesn't sabotage their higher priorities.
Suppose you're a 50-something who intends to retire at age 70 and then travel abroad. Would you be comfortable meeting hefty mortgage payments at that stage of your life?
One approach that could allow you to buy a better home and also pursue a fulfilling retirement is to finance the purchase with a 15-year mortgage rather than a traditional 30-year one, Knight says. Then your home will be paid off, or nearly so, by the time you retire.
"With the shorter term, your payments are not that much higher," he notes.
-- Seek a lifestyle focused on the future as well as the present.
Knight says many couples underestimate the number of years one or both will be retired.
"People are living longer and as they grow older, some of their expenses, such as health care, increase," he says.
The good news for many late boomers is that they still have time to build a retirement nest egg without sacrificing near-term money goals.
"If they're focused on their savings and are willing to work long enough, it's possible for lots of people in their 50s to have it all, including that dream home they always wanted," Knight says.
(To contact Ellen James Martin, email her at email@example.com.)