1. Retirement Planning For 30-Somethings: Introduction
  2. Retirement Planning For 30-Somethings: Check Your Progress
  3. Retirement Planning For 30-Somethings: Enhance Your Budget
  4. Retirement Planning For 30-Somethings: Increasing Your Savings Rate
  5. Retirement Planning For 30-Somethings: Reducing Savings
  6. Retirement Planning For 30-Somethings: Managing Life Changes
  7. Retirement Planning For 30-Somethings: Managing Your Credit Score
  8. Retirement Planning For 30-Somethings: Managing Your Investments
  9. Retirement Planning For 30-Somethings: Avoiding Withdrawals
  10. Retirement Planning For 30-Somethings: Deposits And Loans
  11. Retirement Planning For 30-Somethings: Retirement Resources
  12. Retirement Planning For 30-Somethings: Conclusion

Experiencing life changes can have a significant impact on your retirement planning strategies, and the way in which you handle such changes can determine if they derail or postpone your retirement plans. The following are some considerations: Getting Married
If you are getting married, one of the first financial decisions you will need to make is
how much you and your spouse-to-be should spend on your wedding. If having a lavish wedding means having it financed by a loan, it may not make good financial sense to do so; a more practical solution would be to use the funds as a down payment on a home. Still, if you prefer to spend more on a wedding instead of using a more cost-effective option such as being married by a justice of the peace at city hall, consider taking some measures to keep the cost of the wedding manageable, including:

  • Shopping for an inexpensive dress: The wedding dress can be one of the most expensive items associated with your wedding, but starting the search for the "right" dress early increases the chance of finding it at a more affordable price than shopping at the last minute.
  • Book the venue early: Good wedding venues are usually booked for at least a year, and waiting until the last minute will limit your options and possibly increase the cost. If you start searching for a venue early and you find you are unable to afford a traditional location, other options, like using a friend's backyard for instance, may significantly reduce the cost.
  • Limit the number of guests: It can be tempting to invite every family member and friend on both sides of the family. However, if cost is an issue, it is more practical to limit the guest list to those you are closest to.
When planning a wedding, it sometimes makes sense to start with a budgeted amount and then limit expenses to what can be covered by that amount. This will not only prevent you for spending more than you can afford, but it could help you to start off on the right financial footing with your spouse and set the stage for good spending habits and money management.

Having Children and Planning for College
According to the US Department of Education, National Center for Education Statistics, the average cost of attending a four-year college is about $14,000 per year at a public institution and $32,000 at a private institution, compared to the 1980-1981 average cost of $2,500 per year at a public institution and $5,500 per year at a private institution.[i] If you have children, this cost will likely increase significantly by the time they reach college age. Failure to plan ahead for these costs could cause you to either use your retirement savings to help finance their college education or apply for student loans. To prevent that from happening, consider using one of the tax-beneficial means of saving for college, such as:

  • Education savings account (ESA): Anyone can contribute to an ESA for a child, which means it is an ideal account for adding any cash gift your child may receive. The maximum amount that can be added each year is $2,000, and contributions cannot be made after the beneficiary reaches age 18, unless an exception applies. While contributions are not tax deductible, earnings grow tax-deferred and distributions are tax-free if used to cover qualified expenses.
  • College savings plans: The contribution limit for college savings plans vary by state, and some states even allow a tax deduction for contributions. You can add amounts to a college savings plan over the years or use amounts to pre-pay for credits at a participating college. Similar to ESAs, earnings accrue on a tax-deferred basis, but distributions are tax-free if used to cover eligible expenses.
In the event your child chooses not to attend college, or receives grants, the balance in the accounts can be rolled over to an eligible family member.

Furthering Your Education
Investing in your education can lead to better job opportunities, promotions and general professional advancements. All of these options usually mean an increase in income; and an increase in income would mean having more disposable amounts to add to your retirement nest egg. If you choose to further your education, consider the following:

  • If you do not already have a college degree, does your employer require that you do in order to be eligible for certain promotions? If so, pursuing a college degree might be necessary and highly beneficial.
  • If you do not have a college degree, would it be more beneficial to pursue a professional designation? In some cases, a professional designation or certification may be more valuable than a college degree; for instance, if you are a financial planner, your clients, prospects and employer (if you work for a company) may place a higher value on a certified financial planner (CFP) designation than a college degree.
  • If your employer does not offer tuition reimbursement, determine if you can afford the cost. Comparison shop to ensure that you choose the best and most affordable options.
Even if you already have a college degree and professional designations, furthering your education could make you more marketable in the event you need to change jobs or apply for a more senior position within your employer's firm.

Retirement Planning For 30-Somethings: Managing Your Credit Score
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