No matter what stage of adulthood you are in, taking the time to do some life planning is a wise idea. The earlier you start planning for the future financially, the more secure your family is likely to be in the long run. There are many ways that you can manage your family’s financial future, and starting as early as possible allows you to ensure that your financial situation can withstand the ups and downs that may come down the road.
Ensure your financial wellness
It is essential to take advantage of any opportunities that present themselves to reinforce your financial wellness. Health insurance is one example. Even if you’re in your 20s or 30s with no real health concerns, having insurance is a safety net against huge medical bills.
Nerdwallet further points out that points out, in general, people are far more likely to need disability insurance than life insurance at some point in their lives, whether it be short-term or long-term. It may be tempting to take on the smallest amount of coverage possible but try to look ahead to what your financial needs would truly be if you needed to be out of work for a few months.
Forbes reinforces that starting your life planning as early as possible is key to long-term stability, and they note that making these kinds of decisions as soon as you graduate college is the way to go. As you embark upon your career, you may be primarily focused on student loans and buying your first real home, but you should also start contributing to a retirement account of some sort at this point as well, and it pays off to take advantage of that opportunity. Check out these five financial considerations for college graduates.
Don’t put off starting to plan for retirement
Maximizing your contributions to something like a 401(k) account from the first day you can is a great way to build a healthy nest egg for your retirement. Designating some portion of your income to retirement accounts may also help you in regard to your tax liability, as the tax documents provided at the end of the year can help you to reduce your taxable income and liability in many cases. There are many options out there for self-employed people, including a SEP IRA, which is designed for freelancers and business owners in mind.
Another key life-planning process to work through is putting together a will and documents that detail what you want done in the case of a medical emergency or your death. Kiplinger shares that only a small percentage of Americans have a will, and of those that do, many have not tackled decisions and paperwork beyond that. Powers of Attorney and Health Care Proxies are essential to get put into place as soon as you are an adult to ensure that your wishes are known.
Put together a will and other life-planning directives sooner rather than later
You will work hard throughout your adulthood to build up financial stability for yourself and your loved ones, and a will and additional life-planning decisions will ensure that those assets are protected and eventually distributed in the way that you desire. Along with the decisions related to your will, it is also smart to consider an advanced medical directive and any power of attorney decisions or trusts that may benefit your family down the road.
Death can be an uncomfortable topic to think about but making funeral arrangements can help your family save time and money. Consider investing in burial insurance, which covers funeral costs, including funeral home services, transportation, and cremation. Some of the funds can also be used to cover any debts you may leave behind, including medical bills and credit card debt. These funds are paid out to the beneficiaries after you pass away. Many insurance providers offer plans to individuals as young as 30 years old, so you don’t have to wait until your golden years to start making these important decisions.
When you are working on your life planning, take advantage of insurance coverage available in your area and consider what your family’s needs will be down the road if you face a medical crisis or disability or pass away. It’s also important to make decisions regarding retirement accounts, wills, medical directives, and insurance policies sooner rather than later to give you and your family financial security and stability that will be greatly appreciated when and if a crisis arises.
Estate planning is an important piece in planning for your future. The estate planning attorneys at Murphy & Rudolf, LLP can assist in preparing essential documents to your estate plan, including Wills, Health Care Proxies and Powers of Attorney.