As a newlywed, I’ve started asking myself where I need to be financially as I look forward to starting a family, preparing for the unexpected, and planning for retirement. I want to make sure that I am on the right track before it's too late.
Harry Anand, founder of AIM Inc, has been in the Insurance business for more than 30 years focusing on Life Insurance, as well as Tax Free Retirement, Social Security Benefit Maximization, Annuities, and other financial services.
Learn How to Budget & Save
The first step to any journey is to plan your budget and start saving. Begin learning how to budget in a way that makes sense to you. Whether that looks like adding up all your bills and making sure your checking account never falls below a certain number or scheduling when your bills come in. However, the most important step is to slowly start putting $10-$100 away into your savings after every paycheck. Eventually, if your budget allows you can start adding more. The overall goal is to build up a savings account that can hold you over for 6 months in case of the unexpected, such as the loss of a job or car troubles. Once you are able to achieve a 6 month saving cushion, then you can look into placing money aside for investment, annuities, or an IRA in order to build additional income for when you are ready to retire.
Insurance
Insurance is important to consider adding to your financial plan if you're interested in providing a measure of security for yourself and your loved ones.Life insurance is designed to protect your family and other people who may depend on you for financial support. Proceeds from a life insurance policy can be used to pay final expenses, eliminate outstanding debts, or cover day-to-day expenses.Life insurance can even protect you in case of injuries that prevent you from working. Whether insurance is a smart investment may depend on what you need and want a policy to do for you. Things to keep in mind though.
-
There is roughly no age limit for obtaining life insurance. However, some restrictions exist for people over 50 attempting to obtain. This means your children, spouse, family and friends are likely eligible to get covered during COVID-19 and beyond.
-
Life insurance is very affordable. The average cost of life insurance is $27 a month. This is based on data provided by Quotacy for a 40-year-old buying a 20-year, $500,000 term life policy, which is the most common term length and amount sold. But life insurance rates can vary dramatically among applicants, insurers and policy types.
-
There are life insurance policies that cover COVID-19. Given the fact that one can enroll one’s children or spouse in life insurance due to flexible age limits, it must be noted that death due to COVID-19 is covered in life insurance policies. In the event that a loved one is lost during these unprecedented times, with life insurance you can ensure that resources are provided for you and your family.
-
Life insurance pays quickly! As compared to virtually all other types of insurance payouts, life insurance will pay out funds to dependents of the recipient within a short period of time. Thus, should the unexpected happen, your loved ones will be quickly taken care of.
-
There are ways to receive support even if the recipient of the life insurance policy is still alive. Through the “riders” feature or addendums within the life insurance contract, one can access “living benefits” for one’s self or one’s family in case long term care or other emergencies require resources from the policy.
Retirement Planning
Ideally, you should start saving for retirement in your 20s. It might seem backwards to worry about your retirement income before you think about meeting any other financial goals. But because compounding is so powerful, starting early gives you more flexibility later on in life.
Imagine you start saving at age 25 and dutifully put away $10,000 a year, including any matching contributions your employer offers. But at age 40, you need to stop saving for some reason. However, your friend starts saving at age 35 and saves the same $10,000 a year for the next 30 years, until you both retire. Believe it or not, you'll have more money than your friend, despite having put away only half as much.
Something else to consider is how to invest your money for retirement. Annuities are long-term investments that can make sense for some investors when it comes to making choices for retirement.
An annuity is a contract between an investor and an insurance company. In exchange for one or more payments, known as premiums, the insurance company guarantees periodic payments back to the investor. Typically, these payments are made for the remainder of the investor's life, or possibly that of his or her spouse as well. Some annuities also come with additional features, such as a minimum increasing death benefit or an accidental death insurance benefit.
Get Help
It's never fun to read about all the things you should have in order, especially since everyone's financial and life situation is different. However, it's important to remember that you don't have to go at this alone.
It’s absolutely ideal for everyone — including someone in their early to mid-30s – to look to a credentialed expert for support.
For a FREE consultation, please call Harry Anand at (909) 985-3659 or 1-800-301-8818. CA Lic. #0792051.