Home  Personal-Finance There's More To Financial Planning Than Life Insurance
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There's More To Financial Planning Than Life Insurance |
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Written by StephenDaniels
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Monday, 22 February 2010 |
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In these times of budgetary stress, it's easy to lose sight of the future and the necessity of planning for its arrival. For too many people, a life insurance policy, and perhaps a basic 401k through their employer, is the extent of their financial preparation for the future. However, a trusted financial planner can help you look beyond the basics to create a sustainable plan that will ensure your family's financial stability.
by StephenDaniels
In these times of budgetary stress, it's easy to lose sight of the future and the necessity of planning for its arrival. For too many people, a life insurance policy, and perhaps a basic 401k through their employer, is the extent of their financial preparation for the future. However, a trusted financial planner can help you look beyond the basics to create a sustainable plan that will ensure your family's financial stability.
One of the first steps a good planner will take is to help you create a budget that includes saving for retirement. The amount you've decided to put aside can be automatically deposited into a savings or investment account, removing the temptation to spend your entire paycheck and making saving a painless habit. Generally speaking, setting aside at least ten percent of your income will build a comfortable cushion in later years.
Regular saving is important, but it's not the only concern when planning for the future. Stocks, bonds and other investments, when used carefully, can supplement your income both before and after retirement. Many people lose sight of the fact that Social Security only covers the most basic necessities. Should you wish to have a comfortable retirement without living in straitened circumstances, you will need to have other resources in place.
Good financial advisors can help you consider all the angles to plan for your financial future, including health, life expectancy, probable inflation rates, how investments are likely to perform, and more. Your advisor can also suggest wealth management strategies regarding taxes and interest rates to maximize your income after retirement.
If you have enough discretionary income, your financial planner might also suggest alternative investments. These include an infinite number of possibilities, ranging from fine art or wine collecting to more mundane commodities such as real estate, hedge funds, venture capital and other types of diversification. In addition, your advisor will almost certainly advise the purchase of a commercial annuity that will last till the end of your life.
Financial planners often also will help with estate planning (or at least some aspects of it). You'll want to think about this matter at least somewhat early on in order to make certain that your family will be financially secure even if something happens to you. Financial planners can suggest the best life insurance policies that will meet the needs of your family and situation, as well as advise on how to designate beneficiaries. He or she also can recommend some ways to minimize any possible estate taxes.
Whether you are a knowledgeable investor or a complete beginner, you will almost certainly benefit from expert advice for long-term financial planning. A good financial advisor can suggest various investments and other options that you might otherwise have overlooked. These professionals can be a big help in creating a roadmap to increased financial security for both yourself and your family.
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