Whether you are just starting out or nearing retirement, you need money to fund your daily life as well as your hopes and dreams. The key to having what you need is to make good choices – all along the way.
Your day-to-day decisions on how you spend your time and money determine what your life will look like – from career accomplishments to material wealth. If you want to be financially secure, you need to take regular steps toward that goal. Here are some key considerations to help keep you on track at every stage of life:
- Starting Out
Choices you make as a young adult can have long-lasting financial implications for your future. Even when you are tempted to enjoy the fruits of your labors, be sure to track your income and expenses with a monthly budget and set aside at least 10 percent of your paycheck for future needs. Be sure to take advantage of all the employee benefits – such as a retirement plan or health insurance – that your employer offers.
- Buying a House
Be well prepared for this significant financial step by clearly understanding your long-term financial picture before you buy, and exploring financing options including first-time buyer incentives and tax credits. Be sure you have disability insurance to protect your income and an emergency fund for unexpected expenses.
- Getting Married and Starting a Family
From the start, set clear goals for your life together and create a financial security plan to reach them. A financial representative can help with this, as well as with life insurance and other options to protect loved ones if something happened to either parent. It is never too soon to start saving for college as well as other future needs.
- Building Wealth
You need to save consistently, with disciplined commitment to your long-term financial security plan, to be truly prepared for retirement and beyond. Start saving early to take advantage of compounding interest, and utilize mutual funds or employer-sponsored 401(k)s for your long term goals. Your diversified asset base should include various options such as permanent life insurance, which offers guaranteed cash-value growth as well as insurance protection.
- Managing Career Transitions
An emergency fund with six to nine months of living expenses will address your financial requirements if you experience a job loss or want to pursue a career transition. When you are considering a change, be sure to evaluate the various ways your life might be affected, such as adjustments in commuting time and expenses, lunches, travel costs or wardrobe requirements. Be sure to roll over your IRA from your prior employer’s fund to avoid taxes and penalties and pursue employer-sponsored retirement benefits available at your new job.
Americans are living longer and it’s never been more important to maximize your income, protect your assets from risk and ensure you have what you need for retirement. A Northwestern Mutual financial representative can help you evaluate your assets and determine how best to protect against risks, such as long-term care, and convert your personal savings into retirement income.
- Leaving a Legacy
If you want to leave a legacy, whether for your loved ones or the broader community, estate planning will help you meet your goals and ensure that your assets are transferred as you wish. You need both an inventory of your assets and legal means to distribute them, including beneficiary designations and wills. As part of your financial security plan, a financial representative can help you choose the best way to meet your legacy goals, including life insurance and trusts.
A financial security plan can guide you in making positive financial choices throughout life. Developed based on your unique needs, hopes and dreams, and provides a roadmap to help you fund them and is adjusted from year to year to reflect your specific life stage. Contact a financial representative for help in creating the best plan for you.