At Midlife

If you’re living between the years of young adulthood and senior status, you’ve got a lot to think about when it comes to managing money. Among the issues you face: how to maximize your income during your remaining work years so you’re better positioned to retire when, where and how you want. Here are some suggestions for minimizing stress and maximizing results.

• Save as much as you can for retirement.
  
  Speak with a financial planner or other personal advisor about a recommended investment strategy for your age and stage of life – especially the mix of stocks, bonds, mutual funds and lower-risk alternatives such as U.S. Savings Bonds and bank deposits.
• Explore tax-preferred ways to save money for a child.
  
  State-sponsored “529-plan” savings accounts and Coverdell educational savings accounts carry tax advantages and help families and individuals save for higher-education expenses.
  Many families may be able to qualify for a tax break on earnings from certain U.S. Savings Bonds used for educational purposes.
• Do your homework if you need a loan to pay for a child’s education.
  
  Ask questions and fully understand the fees, the interest rate, and when loan payments and interest charges will begin.
  Shop around at multiple lenders, read all the fine print and borrow only what you need for school-related expenses that are not covered by grants, scholarships or other sources.
• Make the best use of a financial "windfall."
  
  Ask a financial or tax advisor about the best options, which may include starting or adding to a rainy-day fund for emergency expenses or putting money into your retirement accounts.
  If you deposit a large amount of money in a bank account, make sure it is fully protected by FDIC insurance.
  Consider paying off high-interest debt, such as the outstanding balances on your credit cards.

The above information is an excerpt taken from a new Federal Deposit Insurance Corporation (FDIC) publication titled, "Money Tips for All Ages: Your Finances at Different Stages in Life." The advice, in a special edition of the agency's quarterly FDIC Consumer News, can be read or printed online at www.fdic.gov/consumers/consumer/news/cnspr08.