3 Financial Goals to Reach Before You Hit Retirement

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Financial goals for Americans have changed drastically due to the COVID-19 pandemic. 

According to Pew Research Center’s findings, many Americans are still worried about meeting their basic needs, even though their financial concerns are less pressing than earlier in the pandemic. 

Pew Research Center Report on COVIDS FINANCIAL IMPACT

Overall, 42% of Americans say they’re spending less money than usual, and the main priority for low-income households is to survive.

The ideal solution to come out of the financial stress is to grow your assets gradually over time, and ensure you have a strong safety blanket to avoid unexpected events like COVID-19.

Rather than setting a specific sum like a few million dollars as your financial goal which can lead you to make illogical compromises like spending your maximum life in work to achieve your set goal rather than enjoying with family.

While we want to have enough money to afford our own house, insurance, investments, and comfortable retirement, the best we can do right now is to balance our goals with existing responsibilities. 

So, here are the 3 most basic financial goals you should achieve before you retire so that you live your life to the fullest and hit your retirement at an early age.

3 Financial Goals to Reach Before You Hit Retirement

#1. Zero Debt

Young adults start taking student loans to sustain their education and they graduate under debt which further leads to getting credit card outstandings, car loans, and mortgages.

According to the Survey of Consumer Finances, Americans carry an average personal debt of $140,420 and the consumer debt has risen to $14.56 trillion in the United States as of December 31, 2020.

consumer debt

Any kind of debt whether it’s a student loan, credit card bill, or mortgage payment, will be a drag on your income.

 If you want to make the most out of your finances or set any other financial goals at all, getting out of debt — or at least keeping debt under control — is a requirement. 

Being debt-free means you have more money to save and invest which you otherwise will be utilizing in paying heavy interests. 

There are many ways to manage debt, such as paying credit card balances before the last date kicks in or adding new debt only when you can easily repay it. 

Based on research from the Society for Industrial and Applied Mathematics, you can even find an “optimal” way to pay off debts like student loans. While the intuitive approach is to pay it off little by little or as quickly as possible, these don’t take advantage of eventual loan forgiveness. 

This model suggests that it is better to maximize payments over the first few years to keep the loan balance from exploding, then switch to income-based repayment and take advantage of forgiveness later on. 

The point is to calculate before deciding on a debt repayment strategy, and find what works best for you.

#2. Emergency Fund

An emergency fund can help with any sudden medical expenses, job loss, or an unexpected event you need to pay for. It’s an immediate source of funding that’s halfway between your paycheck and investment account, so you don’t disturb any long-term investments you may have. 

Having some cash in reserve also takes away a lot of your financial worries for the future. Secondly, in case of emergency, you need not break out the credit cards if you are keeping an emergency fund, that will help you stay away from the debt trap.

Ideally, aim to keep at least 3 to 6 times of your current monthly income in your emergency fund. Or the minimum emergency fund that you should maintain is between $1000 and $2000.

You can begin building your emergency fund by identifying how much you can afford to save each month. Include it in your personal budget, and commit to setting aside money in an easy-to-access, liquid, and low-risk investment vehicle like a savings account. 

It’s okay to start small, as long as you’re consistent about it. 

Another strategy is to take advantage of one-time saving opportunities; lump sums like tax refunds or job bonuses give you an opportunity to save more than usual. 

#3. Multiple Income Streams

Creating multiple income streams like side-hustles, part-time jobs, online side businesses, rental properties, and investments, keep you from being dependent on a single source of income. 

You not only enjoy more income but also help you pay off debt faster and give you a financial cushion in case one source of income fails.

Moreover, multiple income streams also help you hit the early retirement goal and enjoy a financially independent life.

Ideally, these income streams should be passive, scalable, sustainable, enjoyable, inexpensive, and flexible. You don’t want to get into debt to fund them, nor do you want to spend more time and energy than you would with your primary job. 

Passive income streams could be running a blog, an affiliate business, investing in stocks or mutual funds, or any side business that won’t need your full-time attention but still generate enough money to achieve your financial goals in the long run.


If you work on the above-discussed 3 steps you can easily hit your retirement at an early age, enjoy financial freedom and do what you love to do rather than working the whole life to pay your monthly bills.

You can start with reading some of the best finance books for beginners that would help you make different strategies to handle your expenses, increase your investments and create multiple income sources before easy and early retirement.

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