- More than half of the self-described Asset Maximizers in the Ameriprise Ages, Stages & Money1 study receive advice from a financial advisor.
- They credit “living within their means” as the key to accumulating assets and want to ramp up savings, investments and retirement accounts.
- In the next five years, the majority want to reach an investment milestone, pay off a mortgage and stop worrying about money.
Perhaps you really can defy your age—at least when it comes to financial priorities.
This is particularly true for a broad spectrum of 30 to 60-year-olds who categorized themselves as Asset Maximizers in our Ages, Stages & Money study. These participants have primarily accumulated assets by living within their means — with more than half of them receiving advice from a financial advisor. Their current focus is to:
- Ramp up savings
- Optimize investments
- Grow assets in retirement accounts
- Achieve other goals
Regardless of age or income, the majority are concentrating over the next five years on three specific priorities, as follows:
Priority: Reaching an investment milestone
Many Asset Maximizers are in their prime earning years and know retirement isn’t as far away. Although nine out of 10 respondents in the study cite the amount of retirement savings they believe they will need, there is a gap between that target savings amount and what they have now.
This group faces another challenge. Although one of the best ways to reach an investment milestone may be to simply increase periodic contributions, nearly two-thirds find it somewhat complex or very complex to determine the appropriate level of risk in their portfolios. In other words, what’s a comfortable tradeoff between pursuing growth against the risk of financial losses?
This is the top stated reason Asset Maximizers value working with a financial advisor. Your Ameriprise financial advisor can equip you with information to understand your tolerance for risk, make informed decisions and take prudent steps to reach your investment milestone.
Priority: Paying off a mortgage
Entering retirement with the mortgage paid off is a common aspiration, so paying off the loan early can be tempting. Should you increase payments to save on interest? Or would it be better to invest the extra cash if you can realize returns that exceed your mortgage’s interest cost? It’s a decision that should be weighed carefully.
If you’re thinking about paying off your mortgage early:
- Consider the interest versus investment equation carefully. While you can calculate the return on paying off your mortgage early (the amount of money you would have paid in interest), you can only estimate a reasonable rate of return from investments.
- Factor in unexpected events. A health event can be expensive. To help prepare, fund savings — three to six months of living expenses is a good benchmark — and retirement accounts, and pay off high-interest loans.
- Get a second opinion. Your financial advisor can help you explore scenarios based on income, savings, lifestyle, expenses and risk tolerance. A tax consultant can help you understand how retaining or paying off your mortgage will affect your tax situation, a component that is often more impactful than homeowners might realize.
Priority: Stop worrying about money
Most respondents in the Ages, Stages & Money study have had financial setbacks — job or market losses were top reasons — and most have recovered. At any age or life stage, you can take the following steps to feel more confident about your financial future.
Talk with your Ameriprise financial advisor
Even investors with a good handle on managing their money can seize opportunities to strengthen their financial future. A financial advisor can be an effective resource to help you navigate different life stages, avoid mistakes and address hiccups along your financial journey. In fact, more than half (56%) of all study respondents said they work with a financial professional. Aside from generating returns on investments, they cited these top three benefits as what they value most about the relationship with their advisor.