If you are in your forties and you have no financial plan for your future, this article is for you. Maybe circumstances of life have kept you living paycheck to paycheck and you haven’t given any thought to the future. Now is the time to make plans.
Divorce, illness, job loss and other unforeseen life events can throw you off a good financial path. When you were in your twenties maybe you didn’t give too much thought to how you were going to survive once you got “old”. Your thirties went by as you married and raised a family and now, with the passing of time you realize that you do not have a financial plan for the future.
Many people still ignorantly think that they will have Social Security benefits as an income to count on. Most baby boomers who are now in their 50’s know that living off of Social Security is living in poverty. You are going to need more than that to survive.
Ignorantly some people might think that they will just plan to never retire. This is not realistic. As we age there is no guarantee that your health will allow you to work the way you can now. When a serious health crisis strikes and you are not financially prepared to deal with it, you can lose all your assets.
Having health insurance isn’t enough for the coverage of serious illnesses such as cancer. If you were to lose your job, you may lose your health insurance also. Not planning for these life challenges could leave you at risk for financial ruin.
No one wants to be a burden to their children when they become unable to take care of themselves, whether it is physically or financially. Someone who has worked their entire lives shouldn’t find themselves at the brink of homelessness once they become unable to support themselves financially. Here are some tips on what you need to do right now in order to set a plan for your future.
Sit down and determine your net worth.
If you own a home or other property, what is the true value of it? How much of a mortgage do you still have on it? If your children are grown and out of the house, do you really need to be making payments on a home that is too big for your needs?
Consider the idea of downsizing in order to be able to have cash to use for planning for your retirement. If your home is paid off, you still need to pay for the upkeep and taxes. How long will you have an income to support living in your home?
Look at your health and the health of your partner (if you have one). If one or both of you have struggled with health issues, expect these issues to possibly worsen as you age. Do not take for granted that you will be able to work into your 70’s or 80’s.
Do you have a will? If you do not, both you and your spouse need to write one. Having a will is more than deciding who will inherit your fortune. Just because you have no significant amount of an estate doesn’t mean that you shouldn’t have a will. A will spells out your instructions for your burial plan and division of any property you may have.
Especially if you and your spouse have been married previously and have children from a different spouse you need to have a will to spell out your individual wishes. Protecting your spouse and your children can only be done if you make your wishes known legally.
Find a financial planner who charges a fee for his/her services but is not selling anything to you except for advice on investment planning. Be wary of anyone who is pushing you into making an investment that sounds too good to be true. If you cannot get references from a friend, go to your bank where you hold an account and get retirement investment advice from them. Do your own research. This is about your financial future so don’t jump into opportunities without checking them out fully.
While you are thinking about how you will support yourself during your golden years, check out how much life insurance you have. If your spouse should die before you, will there be enough money to cover funeral expenses, bills and help to support you until you die?
People who depend on their spouse for financial support can be devastated when they are left on their own before they expected to be. Although couples should plan for their financial future together, they should also plan that when one of them dies that the other one is not destitute.
It is never too late
Taking care of making a plan when you are younger is easier. You will have more time to set aside money every month without it being a burden. When you have ignored the impending future, you will need to scramble in order to come up with a workable plan.
It is necessary to do. You have ignored it for long enough. Life offers no guarantees and the ones who plan for the future are the ones who can enjoy aging without worry about finances.