Financial Terms To Know Before You’re 50
Turning 50 is an interesting time in one’s financial life. You’re nearing retirement, but it still seems to be in the distance.
If you have children, chances are they’ve completed college or are working and making their own money.
You are probably at the peak of your career. But still have a lot of living to do — and a lot of financial terms to know around middle age. Becoming familiar with these terms before you turn the big 5-0 will benefit you financially now and into the future.
Terminology About Finances That You Should Know
One of the top finance terms to know is one of the most basic and important. Your assets essentially are everything you own, including real estate, cash, artwork, stocks, and more. Such assets are used to determine your net worth and become very important when writing a will.
A related term: asset allocation, which is how you decide to invest your money, such as in bonds/stocks, or simply keeping cash on hand or in a bank.
Defined Contribution Plans
You likely have a defined contribution plan even if that's not what you call it. Two very important related finance terms to know are 401(k) and 403(b). These are the most common forms of such plans that employers offer as retirement plans.
For both, either you, the employer, or commonly both of you contribute regularly. You don’t have to pay taxes on such accounts, since they come from your earnings pretax.
Speaking of employers, stock options are often offered by corporations to let employees invest directly into an employer’s stock with prices that are pre-set. Stock options are always popular ways to help boost savings or contribute to financial goals such as retirement needs.
Financial advisers usually agree that a primary financial goal before you hit 50 is paying down as much debt as possible. So, among the top finance terms to know is the debt avalanche approach to becoming debt-free.
With the avalanche method, you start your debt-busting by paying off the debt that is tied to the highest interest rate. Then you go to the next highest and so on. You continue to make minimum debt payments and then use the extra cash to pay off the highest interest-rate debt.
Term Life Insurance And Permanent Life Insurance
There is absolutely nothing wrong with having term life insurance, which is an inexpensive life insurance option that makes complete sense when you’re a young adult with one or two young children. But times change and so do your needs.
Since term life insurance usually lasts 20 or 30 years, you’ll likely need to either renew it or go with a different type of insurance before you turn 50.
Forms of permanent life insurance, such as a universal life policy or whole life insurance may be a good option, since it focuses more on inheritance planning, ensuring a financially secure future for your heirs or setting the amount you’d like to donate to charity upon your death.
Credit scores are important to maintain and understand at any age. That makes your FICO Score one of the prime finance terms to know. A FICO Score is the main form of credit score, a number usually between 300 and 850 that determines your creditworthiness.
Many factors impact your score, including how long you’ve used credit, the types of credit you’ve used, and your entire payment history. The higher your score, the better your financial status looks to lenders and credit card companies — and you’re more likely to enjoy better interest rates than those with lower scores.
Consider A Payday Advance
There is another family of finance terms to know that can help you conquer any financial emergency that comes your way. When you are facing unexpected home and car repairs or an emergency room bill, here are some other terms to keep in mind: payday advance, also known as a payday loan.
With a payday advance, you can get the assistance you need between paychecks to cover any financial emergency and get back on your best financial feet. These loans are short-term loans usually paid back when you receive your next paycheck.
At Carolina Payday Loans, Inc. it can take as little as a half-hour to qualify for a payday loan of up to $550. And once you qualify, you can score your payday advance the same day or the following business day.
The best part is that we make the payday loan process as easy as possible. All you have to do is start on our homepage by filling out the short payday loan inquiry form. Once submitted, we’ll give you a call and guide you through the loan process.
Get Started Today
There are numerous finance terms to know before you turn 50, but when a financial emergency strikes, here’s one you’ll definitely want to remember — a payday advance.
For help, today, start online, visit a Carolina Payday Loans, Inc. location near you, or give us a call. Our representatives are waiting to help you with your financial emergency today!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.