Financial Stability in Your 30′s
Case Study on Alex, late 30′s, single. Annual Income: $90,000 Mortgage: $60,000 Investments: $150,000
As you read about Alex, if you see yourself, with some debt, a nice retirement plan balance and single you need to:
- Build an emergency fund with one year’s worth of income. As a single person it is very important to have an emergency fund because you have no other income earner to fall back on in case of emergencies. If you were to become ill, you do not want to dip into your retirement account to meet your expenses.
- Buy disability insurance. You should check with your employer first, they may carry some on you. As a single person, it is especially important to protect your cash flow.
- Buy life insurance. If you have life insurance through your employer, that insurance usually ends when you leave employment. Buy some life insurance outside of work.
- Continue to make your 401k contributions. If you can possibly manage it, maximizing those contributions, especially if your employer matches; that is free money for you.
- Work with a financial planner or investment advisor to review and advise you on the allocation of your 401k assets. You should rebalance your investment accounts on an annual basis to keep the allocation consistent. Some plans are set up to automatically rebalance, ask your investment advisor
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