Offense and Defense Are Key to Your Financial Game Plan 

On the road to the Super Bowl, offensive and defensive strategies are essential to winning the game.  The same is true in your game plan for financial security. Whether you are calling plays in the National Football League or working to fund your most important personal goals, you need both strong offense and defense.

Adapt Strategies as the Game Changes

Developing winning strategies and adapting them as changes dictate leads to success in both sports and in financial security. In your personal financial plan, a strong “defense” helps you manage risk, providing a back-up plan to protect against life events that can impact your long-term security. Your “offense” includes various strategies to accumulate wealth over your lifetime to ultimately meet your financial goals. Having both defensive and offensive strategies in place not only moves you forward on the path to financial security, it gives you the confidence to take advantage of opportunities that may arise along the way.

By helping you explore your specific goals and future needs, a financial representative will develop a comprehensive financial plan that can be the basis for meeting your long-term goals. As your life changes dictate adjustments over time, you would adapt and incorporate the appropriate defensive and offensive strategies to suit your specific situation.

Your defense, strategies that protect against risk, could include:

  • Emergency fund – Covers at least six months of living expenses in an easily accessible cash fund
  • Disability insurance – Helps protect your income by providing a benefit if you should become unable to work due to illness or injury.
  • Long-term care insurance – Helps protect retirement assets by covering potential costs of nursing home and assisted living care
  • Permanent life insurance – Builds cash value over the long term, provides insurance coverage for your lifetime and provides a benefit to beneficiaries upon death
  • Term life insurance – Provides a death benefit for a specified time or up to a certain age
  • Property and casualty insurance – Protects against loss or damage to home, car and belongings

Your offense, strategies that fuel accumulation, may include:

  • Annuities – Fixed or variable-rate contracts that provide a deferred or immediate payment at regular intervals for a predetermined period or for life
  • Cash or cash equivalents – Money set aside in money market funds or savings accounts that is readily accessible
  • Certificates of Deposit – Vehicles in which a specific amount of money is deposited for a specified period of time and guaranteed to earn a set interest rate
  • 401(k) plans – Employer-sponsored qualified retirement plans—with or without employer matching contributions--that allow eligible employees to save for retirement with payroll deductions into tax-advantaged plans
  • Education funding – College savings plans including 529 plans which contributions by parents or others grow on a tax-deferred basis for use by the future student who is named beneficiary of the plan
  • Equities –These include individual stocks, mutual funds and exchange-traded funds (ETFs). These assets might include large cap, mid cap or small cap funds, international funds, real estate or commodities funds. Equity securities are allocated to your portfolio based on your long-term investment strategy reflecting your risk tolerance, time horizon and goals.
  • Fixed Income –Securities that pay a fixed rate of return. This category includes government, corporate and municipal bonds as well as money market instruments and preferred stock. Like equities, fixed income securities are allocated based on your long-term investment strategy.
  • Individual Retirement Accounts – Personal accounts that allow you to set aside dollars for retirement on a tax free or tax-deferred basis in addition to your employer-sponsored 401(k) plan. Different rules and tax advantages apply depending on whether the fund is a traditional IRA, Roth IRA, Roth Conversion IRA or a Rollover IRA
  • Real estate – Your primary home or other real estate investments contribute to your long-term financial security and therefore are part of your financial strategy.

As you navigate the stages in your life, the defensive and offensive strategies in your financial game plan will change to adapt to your specific needs. Whether you focus on covering critical risks as you build college and retirement savings as a young parent, or seek to protect your assets to ensure lifetime income as you retire, a financial representative can help you find the winning plays to achieve your long-term goals.