It's never too early — or too late — to aim for financial independence. Anyone who has money in the bank and little or no debt usually enjoys a lot more choices in life — and a lot fewer problems.

Your need for financial independence is going to change with every phase of your life. When you're young and unattached, independence can mean buying a round of drinks at happy hour or being able to live without three roommates. By the time you're middle-aged, that can change to being able to take time off work to care for an aging parent.

Whatever your particular vision of financial independence turns out to be, you'll need to rethink that concept every time you face a major life change, from getting married and buying a home to raising kids and preparing for retirement. Here's a road map to get you started.

Early Career

Your first years are likely to be when you have the least financial resources. Making a few basic money moves now can pay off decades later.

  • Start your emergency fund: Even a few hundred dollars in an emergency fund will change your relationship with money and yourself. And remember — an emergency doesn't involve anything you can eat or wear.
  • Put anything you can toward retirement: If you have a 401(k) at work and get a match, start small — 2 percent won't hurt. If you don't get an employer match or don’t have access to a 401(k) plan, consider opening an IRA.
  • Get a grip on student debt: Investigate all your options on repaying your debt, such as consolidating or refinancing loans, and see if you qualify for income-based repayment plans. Minimize your payments to help maximize your cash flow.
  • Avoid new debt as much as you can: Don't finance your lifestyle on credit cards.

Settling Down

You may be looking at marriage, buying a home or making a career change. Some preparation and research can help you avoid damage that can take decades to fix.

  • Save half of any salary increases and windfalls: Boost your emergency fund — six months' worth of living expenses is the gold standard — and then up your retirement savings.
  • Look at disability income and life insurance: You are more likely to be hurt and unable to work than to die, so find out if disability coverage comes through your job. You also can purchase your own policy. Life insurance can be inexpensive at this age, but do your research to be sure you need it.
  • Consider buying a home carefully: Are you going to stay put long enough to cover the expenses of buying your own home? That means staying at least five years.

Starting a Family

If you'll be starting a family, discuss how you'll manage child care expenses. And once you have a spouse and children who depend on you, you should help protect them with more insurance and a will.

  • Get a will: Go to a lawyer for a will that will be legal in your state. That includes a health care directive and durable power of attorney so that someone can handle things if you're incapacitated.
  • Plan for kids: Child care can cost as much as college tuition, so decide how you'll care for your little ones before they arrive. One tactic is to live on one partner's income and devote the rest to savings and child care before you bring home your bundle of joy.
  • Live a little — but not too much: Enjoy your improved financial situation but be wary of adding too many luxuries.
  • Save more: Try to get to the level of saving at least 10 percent or even 15 percent for retirement, and a good chunk for other goals.


Now could be the right time to meet with a financial planner to plan your financial future and diversify your investments.

  • Financial planner: Get a life plan started, especially in terms of diversifying your investments. When you become a client, advisors are required to follow a "fiduciary standard" and put your best interests first, so work with one who fits your needs.
  • Put retirement first: Your children can borrow money or get scholarships for college — no one will loan you money for your retirement. This is the "airplane rule" — put your financial oxygen mask on first, then tend to the kids.


If you're lucky, your finances are good, you've avoided financial disasters and you're on the glide-path to retirement. But this also is the age when people find themselves caring for aging parents, sending their kids to college and facing career disruptions.

  • Have the talk with Mom and Dad: Find out what your parents' expectations are in terms of how you'll help them in old age. At least make sure they don't die without up-to-date wills.
  • Have the talk with the kids: Let your offspring know what they can expect from you in terms of college financing and getting started in life.
  • Do some career planning: After 50, your career can become vulnerable to changing markets and technology. Take stock of your options if something happens.
  • Retirement readiness: Check in with your financial planner (or get one). Include discussions about claiming Social Security, helping guard against big market downturns, and what your needs might be when you leave work.
  • Lifestyle choices: Do you want to quit working entirely, work part time, consult, or switch fields? Start exploring the options while you still have time.


Not everyone in their mid-60s is ready to leave work — or can afford to do so. You'll also need to start changing your retirement thinking from socking away your money to figuring out how to structure your withdrawals when you quit working.

  • Full time, part time or your time? Start including your employers or business partners in your plans. You may be able to move to a consulting role, or work part time or remotely. Know what to do with pensions or retirement plans.
  • Get ready for withdrawals: So far, you may have only saved and invested for retirement. Things get much more complicated when you start taking withdrawals and structuring a lifetime of payouts.
  • Estate plan: Update your wills and directives and look at how tax laws will affect what you leave behind.
  • Even if you’re planning to delay retirement, be sure to enroll in Medicare by the time you turn 65 — it could save you money down the road.

Golden Years

After age 72, the IRS requires that you start taking money out of some types of retirement funds, which will affect your taxes and investments. Focus on preserving your nest egg to handle any medical conditions.

  • Mandatory withdrawals: At 73 years old (beginning in 2023 and after), the IRS may require you to make minimum withdrawals from your traditional IRA or 401(k). This can affect your investments and tax status. This age limit is subject to change.
  • Close the "Bank of Mom and Dad": If your children aren't financially independent by now, create a path with them.
  • Stay the course, avoid fraud: If your financial plan is working, stick with it and avoid emotional decisions based on temporary market conditions. Avoid scams that prey on retirees, as well as caregivers, friends or family who might try to exploit you.

There never can be one overarching financial blueprint that gets a person from graduation to retirement, so your decisions and plans naturally will change as you do, and as the economy and tax laws evolve. But there are basic principles — savings, diversified investing, living within your means, planning for the future — that can be your guideposts along the way.

About the Author

Brian O'Connor is an award-winning business and finance columnist, founding managing editor of, executive ghostwriter, custom content consultant and author of "The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese," which was named Best Money Management Book of the Year by The Institute for Financial Literacy. Twitter: @BrianOCTweet

Consult with a professional tax and/or legal advisor before taking any action that may have tax or legal consequences.

Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company. Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc.

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