Young people should consider life insurance if they marry or decide to have children. If they work to financially support a household life insurance can help replace income in case of death. A life insurance death benefit can provide a lump sum of assets can be invested. The invested dollars can generate an income stream to help support a spouse or children. Should the insured person pass away filing the starting career years? Life stage is the timeframe to start saving for a house depending on career, as this savings process can take many years.
People starting their careers by definition, make less money than more experienced workers. Ideally, people in their 20s should set a goal of saving a certain percentage of their income for a home and stick to that plan. The next stage we'll discuss is called middle age. This generally includes people their 30s and 40s. This stage often creates the biggest financial burdens in this live stage. People continue to pay down home mortgages. People in this age range are more likely to decide to have children and incur the costs of raising kids. That cost may include borrowing to buy a bigger home. Middle-Aged people should consider increasing the dollars they're investing for retirement. Finally, people in this age range need to set up a will. I will provide some directions on how assets should be distributed to your errors at the time of death. The next life stage is the peak earning stage, the years that you make the most money. This is generally considered to be between the age of 50 and your early 60s. During this stage, you operate with many years of experience. You also may be managing a number of people at this point in your career beyond the early 60s, many people begin to retire, or at least slow down retirement is getting closer for this group, so they should take a hard look at what the next stage of Life might look like, for example, will you retire completely or continue part-time work? The decision to work is connected to the status of your retirement account in this life stage. You need to plan the final years of investing for retirement, get some financial help to forecast the amount of income your retirement assets will generate add in other retirement income such as Social Security payments. If your income level is less than you plan, you may need to continue working, full-time or part-time into your sixties. Finally, you reach the retirement stage. There'S a practical question be asked here: what will you do during retirement in the peak earnings stage you considered part-time work and retirement in addition to part-time work, will you travel or maybe pursue hobbies financially? This is the time to decide how to take dollars. Out of your investments to fund retirement, how much will you take out each year and how often consult with a tax professional on the tax impact of taking retirement distributions to fund your retirement? Take a look at your will period to see if the language in the will still reflects your intentions. Making decisions requires trading off one goal against another opportunity. Cost is defined as what you give up by making one decision in favor of another say, for example, that you're deciding whether or not to play a sport in college. You realize that it's a huge time commitment. If you decide to play a sport, you may miss out on part of the college experience because of the hours you spend practicing and playing games. On the other hand, college is your last opportunity to play your sport competitively and you love to play. It'S a tough decision either way financially opportunity costs typically involve money time or both assume you're. Deciding between pursuing a career in medicine versus a teaching career medicine offers the opportunity to earn more income, but requires more schooling and more hours working in your career. The medical career offers more income at the sacrifice of less personal time. As you make decisions about your financial planning, you will always face opportunity costs. These costs are not always simply about money and time. Your personal values also enter into the decision. Now, let's consider some common financial planning issues and some alternatives you might consider. Let'S look at another example now assume that you're 45 years old and have not been conceiving consistently for retirement you'd like to retire at age 65 on an income of $ 60,000 a year. So you decide to sit with a financial planner. You provide the planner with your current retirement assets and your income. The planner calculates the percentage of annual income. You will need to invest to meet your financial goal. The financial planner determines. You must invest 20 percent of your before-tax income to fund your retirement and meet your $ 60,000 retirement goal. Now this decision involves opportunity costs. You can certainly create a personal budget to invest 20 % of your income to meet your retirement goal. That large investment may mean giving up certain spending that may impact your current lifestyle. Maybe you give up an out-of-town vacation each year. Maybe you take a trip every other year. Instead, you might have to give up an expensive hobby or cut back on dinners out each week. Essentially, you have to decide which alternative is more important to you. Are you willing to live a less expensive lifestyle for 20 years, so you can reach the retirement goal at age 65, if not, you'll need to continue working past age 65 to fund retirement. This is a decision. Many people face so you're, not alone. One financial issue that causes a lot of anxiety is caring for elderly parents or parents who simply have health issues. One decision arises when an elderly parent can no longer live on their own. Does the parent move in with a family member, or does the family find an assisted living facility for the parent if the parent does not have sufficient assets to pay for the facility? How much do the children or other relatives have to contribute? All of these examples are food for thought. Consider one potential decision you may need to make in the future. That decision could be. Do I buy a bigger home, or do I switch careers, or should we take that big trip make a note of the decision and jot down some alternatives? If you wait until you're under time pressure to choose an alternative, you may not make an informed decision. The sooner you can consider these decisions, the easier will be to make an intelligent decision. An important part of your financial plan involves planning for risk and to avoid outcomes that you don't want, in other words, taking action to manage risk. Now risk assumes that you have something to lose as an example, you need to protect against assets being damaged or stolen. You also need to protect your ability to earn an income. You can think of this concept in the short term and the long term. In the short term, you need medical care to get over an illness and get back to work over the long term. You need to protect yourself against being disabled and unable to work. Finally, you need to have a plan in place to ensure that your income can be replaced in the event of your death. We'Ll discuss each of these topics. In most cases, you manage risk by purchasing insurance. However, there is an important point to be made about the cost of insurance based on the advertising that is everywhere these days, you may see ads that talk about cheap versus expensive insurance. That'S an incorrect way to think about insurance. Here'S why insurance is all about probability. In fact, the insurance industry hires hundreds of math majors, to become actuaries actuaries, make predictions about future events. If XYZ insurance sells car insurance, they want to predict the number of people who will file a claim based on having a car accident or their car stolen.
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