Investing By Life Stage
Mid-Career

By the time your career is in a groove, you’ve probably developed your own spending and saving habits. You may also have made and begun to pay down some major purchases, like a home and a car. For many Americans, these are the highest earning years. If these generalizations are true for you, consider taking advantage of this opportunity to boost contributions to investment accounts. Below are some other suggestions for this stage of your life.

Keep that emergency fund

Make sure you have a "rainy-day" account that can cover your household expenses for three to six months in case of a job change, major household repair or unreimbursed medical bills. Having this account is important because it prevents you from having to tap your retirement or college savings accounts for emergencies.

Continue to fund your retirement savings

Even if you are saving for your child's education and perhaps helping aging parents, you should not neglect your own savings needs. Try to maximize annual contributions to employer-sponsored plan accounts, like 401(k)s, and your own IRAs. Both of these types of accounts offer you tax benefits as you save for your future.

Start saving for your child’s education

This is a natural time to open educational savings accounts for your child's college education. Consider opening an account that offers tax breaks, such as an Education Savings Account.

Diversify your account

One of the best ways to reduce your investment risk is to diversify your account. That means spreading your savings across different types of investments.

How to choose investments for this stage

Mid-career individuals are often seeking to balance multiple investment priorities: their own retirement, children's college savings and perhaps even helping aging parents. You will want to invest appropriately for each goal. For example, assets earmarked for use in the near future should be invested in funds suitable for a short time frame, while retirement assets should be invested in funds suitable for long-term investment, assuming you have 10 or more years until you will retire.

For personal assistance selecting Homestead Funds, call one of our friendly client service associates at 1-800-258-3030. For online information to help you select funds, go to the "Funds and Performance" section of this website.