Broaden your perspective on foundational planning with B&E’s Ryan Michaelis as he raises questions and shares insight on what you need to know now to have what you want tomorrow.
What is the foundation of your financial life? When your career is moving forward and you’re focusing on the day to day operations of a young family, there isn’t much time left to focus on foundational planning, but IT IS important. I’m Ryan Michaelis, financial adviser at Business & Estate Advisers. I’ll share some tips on what you need to know about planning now to have want you want tomorrow.
Everyone can benefit from a foundational plan regardless of their setting, income or investments. Chances are you’re PAYING money every month on consumer debt like credit cards, student loans, car payments, rent, or a mortgage. Your longer-term goals such as buying a home in five years, getting your masters, saving for your children’s education, or traveling the world are part of this planning.
Think of foundational planning as a GPS for navigating your finances. You know where you want to go, you know where you are – now what is the right route? We at B&E can help! We will help you make map that route and make sure you stay on course! Each route will have an action plan and key checkpoints along the way!
While paying down debt and increasing savings are certainly important, let’s talk about some often overlooked strategies.
Let’s start by looking at the retirement plan offered at work. If there is a match and you are not saving to maximizing that match, you are leaving free money on the table. An increase in retirement savings by just by 1%, could lead to an additional $100,000 for retirement.
Now, how about protecting your growing family. Did you know that 85% of young professionals are severely underinsured? They believe that what they get through their work is sufficient. Often, it won’t even pay their mortgage. As a result, they may have nothing to fall back on as a disaster plan.
And most of them don’t even know that per $1,000 of coverage, group life insurance is often more expensive than buying it out on the open market. It’s really not expensive! A healthy person age 30-35 can get $1 million of coverage for 10 years at a cost of only about $300 per year. Some folks spend more than that in a year at Starbucks!
If you’re wondering how much life insurance a young adult should secure, a good rule of thumb is ten times the amount of your income for a term life insurance policy. But don’t discount those that stay at home to handle the house. Think of the support you’d have to hire if that person left this world.
Lastly, we are frequently asked if one should have a Will. What they don’t ask is should they have a Healthcare Directive and Powers of Attorney, which are often packaged with the Will. And the answer is a resounding yes to all. If something happens to you, do you know what will happen to your money? or to your kids? Setting up your will, the power of attorney, and health directive gives you the ability to make the decisions and take care of your family. This is not typically a complex process nor is it horribly expensive – certainly not more expensive than the cost of not having one. And don’t get stuck on these decisions. It is very easy to change who handles the money or who gets the kids. Just don’t get stuck not having one – because they you have no control over it!
It’s never too soon to start … and it’s never too late to start a foundational plan, and the amount of money you have doesn’t matter, getting started does!
At Business & Estate Advisers we are here to help you make a plan and guide you through it. As you grow in life and your goals and family change, the foundational plan grows and changes with you and for you.
Securities offered through Valmark Securities, Inc. Member FINRA/SIPC. Investment Advisory Services offered through B&E Investment Advisers, Inc. a State Registered Investment Adviser that is a separate entity from Valmark Securities Inc.