You know you work hard and put in long hours, but you can’t do that forever. With a little financial education and assistance, your money can go forever. Wealth or asset management, wealth enhancement or financial planning, no matter the name it goes by, is of major importance to you, your retirement future and your kids. You need more than a smattering of knowledge about what goes on in those subjects.
Home ownership, life insurance, IRAs and 401(k)s are all good basics to start with, but if that is as far as you go with earnings management, you are not taking advantage of a huge share of wealth potential that your efforts can produce for your family now and in the future. If a spouse contributes income and/or assumes a large a role in the management of the home and the children, he/she should have insurance equal to the primary income earning spouse. Do the kids require life insurance at birth, or can it wait until they attain a certain age? Should that policy be cash-value insurance or term? Perhaps the insurance should be term insurance that converts to whole life when each child is 18 years of age. It all hangs on your circumstances and your plans for the future. You need to know what is best for your family just like your certified financial planner knows.
Saving for college is a big deal these days, as tuitions are increasing at four times the rate of inflation. Are those 529 plans right for you? Which state offers the best plan? Or are mutual funds better? What happens if your situation changes and you need to get your hands on some of the money you’ve saved? And do you know which of the 401k savings plans offered by your employer is the best for you? Should you contribute the maximum allowed, or just what the company will match? Should your spouse contribute to his or her 401k also? Is it better to borrow on your 401k for a down payment on a house or to put money aside in a savings account or equities? Do you need the disability and dismemberment coverage, or is it a waste of money? And how about those medical and optical savings accounts?
Please note that retirement planning and estate planning are two different things, but if your investments are in the wrong combinations, the purchasing and ownership of your investments could enrich the government way more than your beneficiaries. At what point in your life should you concern yourself with extended coverage for nursing home care? If you do everything right by your investments, and don’t make a will, the court will decide what happens to the wealth you have managed to gather through all your time spent on its amassing.
The list goes on and on, and you can’t be a genius at every kind of investment. Too much worrying will make you ‘insurance poor,’ and too little will leave you vulnerable to unnecessary risks. Child care, Obamacare, uncertainties about Social Security and Medicare, taxes, hedge funds, housing; it’s a daunting labyrinth and an awesome responsibility. Should you pay ahead on your mortgage or put it in securities? The way you answer these questions can make the difference between financial security with carefree golden years and becoming a burden on your children later on.
Your mediocre financial planner will probably pay for himself ten times over. A brilliant one is worth his/her weight in gold and could give you potential for wealth in your retirement years beyond your wildest imaginations. Of all the investments you make, the one most critical to a happy, secure retirement is the investment in the solid advice of a top-notch financial planner.