By Debbie Placke, Vice President, Manager Financial Planning Tools and MarketingPrint This Post
Ghosts, goblins, monsters, spiders – What scares you? When it comes to your finances, mistakes and oversights can be very scary and costly! During October, we will review some scary financial mistakes people commit in the hopes that you can avoid making them yourself.
For starters, do you have a financial plan in place? Whether you are just beginning your career, or well into retirement, it is very scary to have no financial plan. If you don’t have a plan, a good place to start may be to sit down with a financial advisor and review your concerns. Based on your stage of life, those could be very different.
Young Investors – You likely have many years before retirement, but it’s never too early to start a financial plan. At this stage, planning importance should be placed on creating a budget and savings plan. You will likely have competing demands for your money. Creating a budget can help you with how to allocate your savings. For example, how much will go towards paying down debt? Saving for your retirement? Saving for college for your children. Time is your best asset, so start saving early and let the power of the time/value of money do its thing for you. How scary would it be finding yourself 40 years from now realizing that you still can’t retire because you didn’t put a plan in place!
Established Investors – As you progress through life, importance will turn more toward retirement goals. How will you pay for your wants and needs during retirement? Have you saved enough? At what age can you afford to retire? It is also important to review the allocation of your investments to assure that they are working towards your retirement goals and not against them. Consider whether you are comfortable with the balance between the desired growth, and the risk associated with those investments.
Retired Investors – Already living in retirement? Even if everything seems to be going well, there may still be financial planning matters to consider. As you are living in your retirement years, you may want to consider changing the allocation of your investments to less risk and more stable income sources. Some other scary concerns at this stage are outliving your income, financing long-term health care needs, and leaving Uncle Sam more than you leave your heirs upon your death. There may be some planning strategies during retirement that can help you take more control of your finances.
Planning can make a world of difference and provide peace of mind so that you have less fears and more security in your future. Your financial advisor has tools available that can help you look at the big picture at any stage of life, and help put a strategy in place for funding your goals throughout your lifetime.
Don’t let your future scare you! Watch our blogs over the next several weeks for more tips on avoiding potentially scary financial mistakes.