About 31% of Americans across different age groups say they could not cover their expenses for a month without their job.
No matter what your age you should try to put a plan in place so that you have sufficient amounts in your savings and investments.
Financial management is not always easy and if you are like most, you will need some tips to help you to increase your wealth in the long term. Here are some financial and income planning tips that will help to set you on the right path.
1. Create a Budget
Budgeting is one of the most important things you can do to grow your wealth. When you create a budget for all of your expenses you will avoid spending randomly.
When you know how every dollar is spent it will help you to realize exactly how much you are spending. It will also help you determine whether you’re spending is necessary or not.
2. Create an Emergency Fund
An emergency fund is a stash of cash that you set aside in case of an emergency. For example, you may get laid off from your job, or an appliance in your home may get broken and you need to replace it immediately.
Having an emergency fund ready with at least three to six months of savings for expenses will help.
3. Contribute to an IRA or 401(k) Retirement Plan
An IRA is an individual retirement account. You can use an IRA account to save for your retirement. You may also save in a 401(k) account towards your retirement.
When you contribute to an individual retirement fund you will be allowed to deduct the contribution from your income that is taxable. With a 401(k) all your contributions are made before tax.
This means that any contribution you make is tax-free in the years in which you contribute to the 401(k) account. This is safe money that you can collect once you retire.
Other types of income-saving ventures you may want to try are Roth conversions, Indexed Annuities, Indexed Universal Life, and Term Life. With a Roth conversion, you can move your funds from a traditional IRA to a non-deductible Roth IRA.
If you prefer you can get an Indexed annuity which will pay you an interest rate based on a market index that you choose.
4. Income Planning Insurance Policies
Another option is an Indexed Universal life which has a cash value benefit and a death benefit. A term life insurance policy will offer your beneficiaries a specified amount when you die.
If you are a federal employee, then you can get FEGLI alternatives. These life insurance policies give you life insurance coverage up to 100 years old. There are also Thrift Saving Plans (TSP) for those who work with the federal government. A TSP retirement plan is a no-risk savings account that will give you retirement funds.
Achieve Your Financial Goals
Income planning goals are not just about how much money you will make. It is also about how much money you will keep.
The amount of money that you keep and multiply through investments should be the core of all your financial goals. Once you have mastered this you will be well on your way to being financially comfortable.
If you would like help with reaching your financial goals, please contact us.