Are Your Ducks in a Row?
Getting your financial life in order can seem overwhelming. And when we do think we have it together, it’s because we’ve set up a lot of “automatic” things that we think are keeping our financial future intact. Just because you are opting into things like a 401k, life insurance through work, or even if you have a financial adviser, it doesn’t mean it’s handled. It’s not just set it and forget it. One of the biggest problems you could face when heading towards retirement is the fact that you didn’t give yourself financial check ups along the way.
A lot of people are offered an employer sponsored 401k plan. You should definitely be taking advantage of this great benefit. Many of us just opt into the plan and think, “Great, I’ve starting saving for retirement” and then never look at it again. This is a huge mistake. Just because you’ve opted in to this plan, doesn’t mean you don’t need to track it. Make sure the money that you are investing into accounts are working effectively and efficiently to get you to the financial future you are working hard to achieve. The last thing you want is to think you have retirement covered, then come to find out your savings made half of what you were expecting. Be on top of financial well being.
Life insurance is something that everyone should have in their financial portfolio. Protect your most valuable asset - yourself. Some companies offer their employees a life insurance plan, which is a great place to start, but most of the time this is not nearly enough. Depending on your age, you should have at least 10-20 times your replacement value in life insurance. Think of it in terms of income not lump sum. A million dollars at 4% would throw off an income of $40,000 (if you didn't withdraw principal). This isn't that much when you put it into those terms, especially if you consider inflation and taxes. In addition, don’t rely on only what your employer provides. Another mistake a lot of people make is that their old employer provided some sort of life insurance but when they move jobs, they no longer get life insurance from their new employer. Then, they never go out and replace the life insurance they once had. Be sure you are protected!
Having a financial adviser gives you an expert to trust, who can help you reach and enjoy your retirement. But don’t make the mistake of just handing over your financial well being to someone else and thinking it will all come together perfectly. Make sure you are educated and up to date with your money and where it’s going. Is this plan really working for you? Is your adviser making sure you’re protected in case disaster strikes? Are you diversifying your retirement savings to make your money work more efficiently for you? Ask as many questions as you can think of. Then ask more questions, and if you don’t like the answers, maybe it’s time to find a new adviser to put your trust in.
Don’t put off handling your finances. And don’t think it’s just a one time thing. Stay involved. This way you avoid surprises and can better plan for your future. Talk to your Leap Adviser to make handling your financial life sane, sound, and simple.