Do you know your challenges and goals?   Do you know what will be demanded of you at the different stages of your life?   A lot of folks are not sure and need some guidance.

Sometimes having a guide to walk you through each stage can be helpful?  The Financial Stages of Your Life Guide will help direct you through the financial challenges that you will face during each phase of your life.   Here’s a review of what the guide can offer you:

The Financial Stages of Your Life Guide

20’s : Getting Started

Your young and wild.   You can do anything, Your invincible.  Now what?

• You transition from education to establishing a career.
• You start looking around to see what the world has to offer you.
• You start working.
• You start developing credit.
• You start interviewing for jobs.
• You start sending applications out for an apartment.

30’s – 40’s : Accumulation

You have begun to settle down.  You have to be responsible now.  There are people counting on you.  What do you do next?

• You get married.
• You start families.
• These are your professional years.
• You develop your careers.
• You start accumulating assets and building equity.
• You apply for mortgages.
• You start your 401k retirement accounts.
• You buy some life insurance policies.

50’s : Final Working Years

Your children are becoming little adults, so now you can focus on your financial goals.  Learn how.

• These are the beginnings of your final working years.
• You accumulate as much as possible for retirement.
• You apply for student loans for your children.
• If you still have outstanding balances on your own student loans you start paying extra on those loans.
• You start to consolidate other outstanding debt.
• You pay off as much debt as possible.

60’s : Begin Retirement

• You start the transition from working years to retirement years.
• You start to ask yourself some serious questions about your future.
• Have you saved enough money for your retirement years?
• Will you have to continue to work during your retirement years?
• If you have to work part-time, what would that look like?

70’s

Ahhh -  Retirement.  Job well done.  You have worked your entire life for these years.   Relax and enjoy them, you’ve earned them.

Related Posts:

1. What’s My Financial Advisor’s Job?
2. 5 Steps To Building Your Financial Foundation
3. Your Family Needs Life Insurance

With the price of everything going up nowadays is it even possible to find ways to reduce any of your expenses?

Yes there is a way to reduce your expenses!  Believe it or not there is one expense category where you can reduce your cost and not have to sacrifice quality.

That expense category is insurance.

There are ways to reduce your auto and homeowners insurance costs, you may just have to work at it a bit.   Let’s review how you can keep more of your money in your pocket and less in the insurance company’s cash register.

Save Money On Your Insurance

Tip #1 -  Slow Down

• Change your driving habits if you have a tendency to speed.  Slow down your driving.
• Most insurance companies check for speeding tickets at least once a year.   Most insurance companies then raise your premiums based on those speeding tickets.
• To save money by lowering your auto insurance premiums, work on your driving and don’t get speeding tickets, period!

Tip #2 – Watch Your Claim Activity

• Don’t file a lot of claims.  Too many claims will increase your insurance premiums.
• It’s very basic: claims cost insurance companies money; insurance companies need to recoup that money, so they raise your premiums.
• To lower your insurance premiums, only file major claims and avoid filing frivolous, minor claims.
• What’s a frivolous claim, to you all claims seem important.  A minor claim would be a loss that’s just an annoyance or an inconvenience to you…(ie) you spill paint on your carpet.  A major claim is when your house burns down….see the difference?

Tip #3 – Improve Credit Score

• Credit scores carry a lot of weight with insurance companies.  Credit scores are being used by more and more financial institutions to determine rates and pricing; insurance companies are no different.
• Insurance companies are using credit scores to draw a line in the sand on premiums.
• Improve credit score to keep your insurance premiums low.
• To an insurance company, improve your credit score above 750 to save money on your insurance premiums.

Tip # 4 – Combine Insurance Companies

• Carry all of your insurance policies with the same insurance company to get the multi-policy discount.   This would include your auto, home, umbrella, motorcycle, boat, disability, and life insurance.
• Ask your insurance agent about getting a discount on your auto insurance because you also carry your home insurance and a discount on your home insurance because of the auto insurance policy.
• Some insurance companies also give discounts on life insurance if you insure the home and auto with them.

Tip #5 – Update Your Insurance Coverages

• Raise your deductibles.
• If your deductibles are high, the insurance company knows that you’re less likely to file minor claims, so they charge you less in premiums.
• If you have an older car look into dropping some coverages.
• Ask your insurance agent about comprehensive and collision coverages on an older car.

Tip #6 – Get All The Discounts

• Inquire about low annual mileage discounts to lower your auto insurance premiums.
• Install a burglar, fire, smoke alarms, dead-bolt locks and other security systems to lower your home insurance.
• Ask your agent about additional discounts that your insurance company may offer to help keep auto insurance premiums down: these extra discounts may include:  airbag discount, anti-theft discount, multi-car discount.
• Quit smoking.  Some insurance companies actually offer discounts on a homeowners insurance policy for non-smokers since unattended cigarettes increase the chance of a fire.

Meeting expenses can be a challenge.  A few simple adjustments to your insurance policies may help you lower insurance costs and save you money.

Lower your insurance premiums by tightening up on your claim activity, avoid speeding tickets, improve your credit score, increasing your deductible, and asking your insurance agent for all possible discounts.

Related Posts:

1. Tips On How To Get The Cheapest Auto Insurance
2. How Do They Come Up With Your Insurance Premiums
3. Discount Your Way To Cheap Car Insurance

If you want to get ready for your retirement, the question you need to ask yourself is whether you will be financially ready to retire when you are mentally and emotionally ready?  It takes money to be able to retire, not just desire.

Prior generations retired based on age, future generations will be retiring based on their financial situations.   In the past once you hit age 65, you retired regardless of how  much money you may have put aside, because social security was a strong source of income.   In the future, that will not be the case.

You will need  to be able to generate your own stream of income to replace the money from your pay check before you can retire.  Financial experts say that you will need at least 85% of your pre-retirement income at retirement.   Unless you plan to continue working during retirement, where will your retirement money come from?

Sources Of Retirement Money

You have 3 sources of retirement income.   You may get some money from social security, but you are better off focusing your efforts on your personal retirement investments.

1) Social Security.

Social security will be a weak source of retirement income.   You should build up your other sources of retirement income and not rely too heavily on social security; it may not be available in the future.

2) Retirement Investments.

Your most reliable source of retirement income will be your 401k account or Individual Retirement Account.   These investment accounts are the most reliable because you control them.   You control the contributions and the investment choices.  You need to stay diligent on making your 401k contribution limits

3) Your Other Investments

You can supplement your retirement stream of income with annuities, savings accounts, real estate and life insurance accounts.

How To Save Enough To Retire

So now that you know the sources of retirement income, how do you generate enough money to replace your paychecks?  Keep in mind that we are living longer than previous generations so we will need more retirement income.

Pay Now Or Pay Later

You have a choice, either spend your money now or save it for later.   You only make so much money so how you spend that money will determine if you have to keep working or not.

Do you really need a cafe latte every morning? Do you have to eat lunch out every day or can you bag your lunch a few times a week?  If you stop smoking you not only save money but you also will improve your health.

If you saved the money from those luxury items you will be surprised on how it all adds up.  If you don’t believe it, try it for a month.

Related Posts:

1. How Annuities Work In Your Retirement Planning
2. 3 Tips To Powerful Retirement Planning
3. 6 Reasons For Making Your 401k Contribution Limits

You worked hard to build up your retirement investment portfolio.  As a good investor you should be aware of the different types of risk that can affect that portfolio, especially your retirement money.  

There are many types of retirement investment vehicles; 401k plans, IRA, annuities.   Remember that regardless of the type of investment vehicle you have invested your retirement money in, your money is rarely guaranteed against risk; and your money is rarely guaranteed against losses.  

There are different kinds of investment risks.  There are risks to your money before retirement and there are also risks to your money during your retirement.  

Become a better investor, make yourself aware of the risks to your retirement money before you retire so that you can make any necessary adjustments along the way.

Risks Before Retirement

Inflation

Inflation, which shrinks the value of your money.   You have no control over inflation and yet it has a big impact on your investment portfolio.  

The impact of inflation can sometimes delay the time frame you plan to retire.   You may have to extend your planned retirement dates if inflation shrinks your portfolio to the point of

Market Losses

Market losses can be the result of a number of things, all of which you have no control over.   Unfortunately, your lack of control against market losses does not prevent you from being indirectly impacted by them. 

Your stocks, bonds, mutual funds, certificates of deposits, savings accounts, annuities and even some life insurance cash values can all be affected by market losses.  Bad markets happen all the time; they are cyclical so you can rarely avoid them entirely; but you can take some steps to offset them.

How To Protect Your Money

So what can you do to protect your retirement investments from pre-retirement risks?

• Invest more money to compensate for the impact of inflation and market losses on your portfolio.
• Increase your investment amounts when the markets are down; stocks and mutual funds are on sale when the market is in a slump.
• Make wiser investment choices; this can help your investments stay ahead of inflation.
• Keep a well diversified portfolio; this can help offset market losses.
• Re-balance your portfolio every 6 months; this will help you buy more stocks and mutual funds when the market is in a slump.

Risks During Retirement

During your retirement you also face inflation and market loss risks but you also have 2 additional risks; the risk of outliving your assets and the cost of health care.

Outliving Your Assets

Regardless of how much money you invest or save during your working years, you still run the risk of not having enough money to last you through your entire retirement years.  

If you did not invest or save enough money during your working years, to avoid outliving your investment assets, you will either have to keep working during your retirement or live below your means.  

Health Care Costs

Most retirees lose their health care benefits at retirement or closely thereafter.   You may find yourself in a situation where you have to pick up the some or all of the cost of health care during your retirement.  The risk that you may pay for your health care costs may be more likely since the passage by Congress of the new health care law.

How To Stay Ahead Of Risks

The steps you take today can make the difference in how you live out your retirement years.    

We rarely know how much money we will need for our entire retirement because few people know how long we will live.  But there are a few steps you can take to get close to investing enough for retirement.

• Invest and save as much money as you possible can during your working years; once you retire you won’t be earning money or at least not as much.
• Take advantage of a 401k plan offered at your work place.
• Invest enough into your 401k plan to take advantage of any employer matching that may be offered.
• Talk with your financial planner about buying life insurance with cash value. You can take a loan out against the cash value if you need extra money for health care or other living expenses.
• Talk with your financial planner about buying annuities.  With an annuity you will usually not outlive the stream of income provided from an annuity.

Related Posts:

1. 3 Tips To Powerful Retirement Planning
2. Avoid Excuses To Reach Retirement
3. Retirement Ready Takes More Than Emotional Ready

Related Posts:

1. Annuities & Retirement Plan
2. Retirement Ready Takes More Than Emotional Ready
3. Using Annuities As Your Financial Tool

Before you hire a retirement planner interview them to make sure they actually specialize in retirement planning so that they can properly advise you on all details of retirement accounts, big details as well as small details.

A good financial planner is not necessarily a good retirement planner. Not all financial planners may have the education or knowledge base to specialize in the details of retirement planning.     There is a difference between a financial planner who focuses their practice on helping families save money for college planning and one who works with families saving money for retirement.

A good retirement planner should be telling you how to financially prepare for retirement plus how to maintain your retirement accounts – 401k account and Individual Retirement Accounts.

One very important detail that a good retirement planner would emphasize is account beneficiaries.    There are a some very good practices that a retirement planner would advise you on implementing in regards to your 401k beneficiary.    Let’s review those.

Is Your Retirement Planner Advising You On 401k Beneficiaries?

What is a 401k Beneficiary?

• A beneficiary is the person or persons you designate to receive the money in your 401k account if you die.
• There is a Primary Beneficiary and a Secondary or Contingent Beneficiary.
• A primary would receive the money from your account first.   If the primary dies, the secondary or contingent beneficiary gets paid the money in the account.
• A primary can be one person who would receive 100% or it can be more than one person and they would split the account accordingly.
• You can have unlimited persons as beneficiary on your account.
• Be sure to always select a primary and a secondary.

Why is a 401k beneficiary important?

• Listing a 401k beneficiary on your 401k account is a detail that seems minor so is often overlooked and should not be.
• Having a designated beneficiary listed on your 401k account is almost as important as having your name spelled correctly.
• If you die without a designated 401k beneficiary listed, your account balance will not be distributed as you had wished; the people you wanted to benefit will not.
• Listing a beneficiary, gives you control.
• You have worked hard on building up your 401k investments; if something happens to you, make sure your money goes to who you want it to.

When should you select your 401k beneficiary?

• Complete the 401k beneficiary forms at the same time you are completing your 401k account enrollment application.
• Do not put off deciding who your 401k beneficiary will be.
• Do not leave the beneficiary portion of the enrollment forms blank.
• When completing enrollment forms many people can’t decide who to “pick” as the beneficiary so they leave it blank.

Where to start:

• Beneficiary selection is so important, be sure to check all of your accounts.
• Ask your Human Resource department or your 401k plan sponsor for a copy of your beneficiaries, they do have that on file with your enrollment forms.
• If you have no beneficiary listed, change that.
• If you want to change who you have listed as the beneficiary, do it, don’t delay.

Other accounts:

• You should also follow the same practices with your Individual Retirement Accounts and life insurance policies.
• Name your beneficiaries at the time you open up the account.
• Check with the financial institution holding your accounts to see who you currently have listed as account beneficiary.
• Yes, you can change your beneficiaries on your IRA’s and life insurance policies just like you can with your 401k account.

Related Posts:

1. When You Should Meet With A Retirement Planner
2. 401K Account Maintenance|The Importance Of Beneficiaries
3. Retirement Ready Takes More Than Emotional Ready

Many factors are used by insurance actuaries to determine home insurance rates.  You may be surprised to know that credit scores have a big impact on insurance rates.  If you can improve credit score, you can lower your insurance rates and save money.

You do have control over most of the factors used; including improve credit scores.  Let’s review what is used to determine the home insurance premiums that you pay and then you can decide if you have the control.

Factors Determining Home Insurance Premiums

Your Coverage Choices:

Discounts:

• Home insurance rates start at a base amount. That base amount can be lowered by discounts.
• A discount will apply by insuring your car with the same carrier that you insure your home with.
• Some insurance companies will also give you a discount if you also buy life insurance from them.
• You can get discounts for having a security system such as a fire alarm, burglar alarm or smoke detectors.

Your Credit Scores:

• A good credit score can lower your home insurance rates.
• If you improve credit score, you can save money on insurance.
• Most insurance companies take credit scores very seriously and so should you.
• The bench mark of a good credit score is 750.
• If your credit score is below 750, get some credit repair help to improve credit score.
• By getting some credit repair help you may be surprised on how much you can lower your home insurance premiums.
• And a bad credit score can also raise your insurance premiums; so if you have a credit score below 750, work on improve credit score.

Your Claim History

• A good claim record will help to keep your premiums low.
• Talk with your insurance agent about the claim history benchmarks used at your insurance company.

Home insurance is sometimes called home and contents insurance because the policy will pay for damages to your home and personal property.

Having home and contents insurance is not the law like having auto insurance is.  But having home insurance gives you peace of mind for catastrophes.   Home insurance rates can seem quite steep sometimes, so finding ways to lower the price can turn out to be quite beneficial.

Most mortgage companies will require you to carry homeowners insurance on your dwelling while you have a mortgage balance.

Related Posts:

1. Why Should I Bother To Improve My Credit Score?
2. How Do They Come Up With Your Insurance Premiums
3. Understanding Your Home and Contents Insurance

When a building is constructed it needs a strong foundation to withstand the test of time and the environment around it.   The same holds true for your finances.

If you are to financially withstand the test of time, you need a strong financial foundation.  If your financial foundation is weak, it will crumble.

Everyone’s financial circumstances are different; so some of the steps outlined below may apply to your personal situation and some may not.  To evaluate your personal financial foundation you should review your life insurance, retirement investments, disability and health insurance and annuities.

Another factor that will help to stabilize your financial foundation are your credit scores.  Take the steps to improve credit score. The financial world evaluates you based on your credit rating; so do your very best to keep your credit score above 750 and as close to 800 as you possibly can.   Understand that improving your credit score goes a long way towards building your financial foundation.

Building Your Financial Foundation

Step #1 – Buy Life Insurance

• The first layer of your financial foundation is life insurance.
• Life insurance is your first layer because it works if you live or die.
• If you die, the life insurance will help your loved ones.
• If you live, any cash value built up within the policy can be used to supplement your retirement.
• When you get your life insurance quotes, the premiums will vary depending upon your age, your health and the face value of the policy.

Step #2 – Build Up Your Retirement Investments

• For your financial foundation to survive long-term, you must build up your retirement investments.
• Social security is weak and will most likely not be enough for you to live on once you reach retirement age; so without a strong retirement investment account, your foundation will also be weak.

Step #3 – Consider Annuities

• Annuities can be a layer within your financial foundation.
• Annuities are not the proper investment for everyone’s foundation; talk with your financial planner about your personal situation.
• Annuities can be a variable or a fixed product.
• The returns in a variable annuity will vary depending upon the market swings.
• A fixed annuity will pay a fixed rate of return.
• Again, work closely with your financial planner on what is best for you.

Step #4 – Look Into Disability Insurance

• You can buy disability insurance on your own or get it through your employer.
• It can be short-term or long-term disability insurance.
• Long term starts when your short-term stops. Long term disability insurance pays a percentage of your salary for 2 – 5 years or until you reach age 65.

Step #5 – Review Your Health Insurance

• A discount health insurance company could offer you lower premiums if you do not get health insurance through work.
• Discount health insurance is offered through a network of insurance providers; which is what helps keep your premiums down.

We get so wrapped up our day-to-day activities that we sometimes forget to step back and review the basics.   Your financial foundation needs to be strong for you to financially withstand the test of time, so take some time today to review your foundation.

No related posts.

Under certain circumstances your life insurance policy can be used as a life settlement.

In tough economic times, life settlements tend to be on the rise; but they are not a good financial move for every life insurance policyholder.   Check with your financial planner before making a commitment to a life settlement transaction.

If your financial situation changes, maybe a job loss or divorce for example, you may consider a life settlement an optional source of funds; but do your research first.

Many life insurance policyholders do not know what a life settlement is or that they may have the option to use a life settlement.   Not all life insurance policies can be used in life settlements.

In case you are unfamiliar with what a life settlement is here’s a simple summary:  a life settlement is when the owner of a life insurance policy sells their life insurance policy to a third-party for a fee.

Using Life Settlements As A Financial Tool

Where Do You Start?

• There are company’s that specialize in life settlements.
• There are financial planners or financial brokers who specialize in life settlements.
• Your life insurance agent may not work with life settlements but may be able to refer you to a financial planner that does.
• How it works is, the life insurance policyholder enters into a transaction with one of these life settlement providers.
• The life settlement provider pays the policyholder for the life policy and then takes over the premium payments.

What Types Of Life Policies Work With Life Settlements?

• Life policies that build up cash value are used in life settlements.
• A life insurance policy has to have cash value for the life settlement company to work with.
• Term life insurance policies are not used in life settlements because there is no cash value build up in a term life policy.

When To Use A Life Settlement?

• When you can get paid a sum greater than the life insurance policy’s cash surrender value.
• When you no longer feel that you need the life insurance policy for the insurance value or the cash value build up.
• Maybe the life insurance policy is under performing, the cash value is not building up as fast as originally projected.
• You need money, and feel as if you have no other alternative.
• You can not longer afford the premiums on your life insurance, but you want something back from the policy.

Are There Other Alternatives?

• Before considering a life insurance settlement you may want to research other alternatives.
• Borrow against your life insurance policy cash value.
• Take out a loan.
• Let the life insurance policy lapse.
• Surrender the policy.

A life settlement is not for every one.  Some policyholders are not comfortable enough or have a financial need that’s strong enough to do a life settlement.  Do your homework ahead of time.

Ask your financial planner and life insurnce agent for advise and direction before making any commitments.

Related Posts:

1. Evaluating My Insurance Settlements
2. Hazard Insurance & Insurance Settlements
3. Your Family Needs Life Insurance

Everyone who wants to retire some day should have a retirement investment strategy.  It sounds very important, what is it?

Your retirement investment strategy is your financial foundation.  It is your plan and your method for achieving your retirement  goals.

Like any strategy, through a series of moves its purpose is to get you to an ending.

If you develop a retirement investment strategy, implement it and stick to it;  you will be prepared for retirement.   Retirement is too important to not be prepared for it;  you could spend 20 years of your life in retirement.

Your retirement investment strategy is not a one time exercise but instead it is a process.   You do not create this strategy and then put it on the shelf.   It is a work in progress.   You will adjust it, change it and massage is as things in your life change.

Your Retirement Investment Strategy:

Step #1 – Establish Your Retirement Priorities.

• Before you start, you need to know where you want to end up.

• Establish your financial priorities as early in your career as possible.
• The earlier you start your retirement investment strategy the longer you will have to perfect it.
• What are your priorities?
• Do you have retirement priorities?
• What are your personal financial goals?
• Is your goal to retire early, retire but work part-time, retire before your brother-n-law, retire and start a business, retire and golf every day, retire and travel?   The list is endless.
• Have you established your retirement priorities?

Step #2 – Establish Your Financial Plan.

• After you have determined your retirement priorities, you need to develop a financial plan.
• You may want to seek the help of a financial planner to develop your financial plan.
• A financial plan is your road map.
• You wouldn’t plan a trip without a road map; so don’t plan your retirement without a road map.
• The purpose of a financial plan is to get you to your destiny.
• You will need to know how much money you will need to save today to retire tomorrow.
• Through retirement calculators and other financial tools, a financial planner can help you determine the amount of money you will need to achieve the type of retirement you have in mind.
• The financial plan may include a budget.
• A budget helps you stay on target and will keep you focused.
• A budget gives you parameters to work within.
• Go outside the parameters of your budget and you have to adjust or cut back.
• It’s not what you make but what you keep that matters when planning for your retirement.
• All of your financial information gets input into a retirement calculator to help you build your financial road map.

Step # 3 – Your Investment Profile.

• Your investment profile reflects your investment preferences.
• Do you like high risk or conservative investments?
• Do you like stocks or bonds?
• Large cap or small cap funds?
• Mutual funds or individual stocks?
• Those questions make up your investment profile.

• Get to know your profile and live within your profile.
• Your profile incorporates the risk level you are willing to tolerate with your investments.
• Make sure your level of risk matches the investments you are in.
• If you are more comfortable with conservative investments, that’s okay.
• Stick with your investment profile otherwise you make investment decisions that you are uncomfortable with.
• If your risk does not match your investment selection, reallocate your assets so it does match.
• You cannot have a wrong investment profile.   Your profile is who you are as an investor.

Your Financial Profile.

• This profile looks at your insurance needs.
• Are you properly insured?
• Do you have enough life insurance, disability insurance and long-term care coverage?
• Work with your financial planner to fill in any gaps that may exist.

Your Review Process.

• Part of an investment strategy is a review process.
• Review your investment strategy, investment and financial profiles at least once a year.
• Your needs change as your life changes.
• When you are single your risk tolerance levels are different than when you get married.
• When you are younger your risk levels may be more on the risky side and as you age, you may become more conservative.
• Your annual review will adjust for these changes.
• If the economy damages your investments, you may have to change when you can retire.
• You need to review your investment strategy to stay on track.

Your retirement investment strategy will help you get to retirement.   Find a financial planner you trust.   Use a retirement calculator to get started.  The earlier you start planning for retirement in your career, the better.

Related Posts:

1. 8 Steps Used By Successful Investors
2. 3 Retirement Investment Tips|Invest For Your Future
3. Investment Strategies That Work