Updated: Nov 29, 2021
Few weeks ago I had a chat with a friend after our 23 miles bike ride. We talked about our parents and the emerging news. She asked me, “Peter, what should I do to protect my financial future?”
This is the advice I shared.
1. Get an overview of your finances
The most important thing you can do for your financial future is to understand your current situation. Begin this by gathering all essential financial documentations. Your assets and liabilities will aid you in calculating your net worth while providing you broad, long term goals. Then, adapt your monthly budget to make short term goals meant to contribute to those long term goals.
Keep yourself in check by using a program like Simplifi by Quicken to monitor any fluctuation in spending.
2. Check any retirement contributions you’ve made
Log-in to any accounts where you’ve made retirement contributions. From Social Security (ssa.gov) to your 401(k), you are looking to receive an estimate of your retirement benefits. These numbers are estimates based on your current contributions as well as predicted future contributions.
3. Check your insurance coverage
Review your insurance plans and other benefits you may have available to you and your family from your employers. Are you taking advantage of 401(k) matching? How about life and disability insurance? Do they have a wellness program? Student loan assistance? If you don’t know, ask.
4. Assess your personal emergency savings
If you’ve learned anything in the year 2020, life will throw some unexpected twists and turns. For many, this is the time where having an emergency cash fund available to you will be a relief. If you haven’t been impacted by some of the numerous changes to hit the average American, then make sure you’ve a nest egg large enough to cover six months of living expenses.
In today’s uncertain environment, conserve as much cash as possible. Check out Suze Orman for smart ways to conserve your funds.
5. Keep important documents updated
Your will, power of attorney (POA) for health and finances, car titles, mortgage documents, deeds, and insurance policies (life, car and home) are several of the important documents you’ll want to keep updated and available to you in a moment’s notice. Keep this in a binder at home or on a drive in the cloud. Ask your financial planner to help you update your insurance beneficiaries each year as well.
6. Invest for the Long-term
During an erratic stock market, keep calm and weather the storm. If you want to invest, now is the time to do it. Stick to a long-term strategy (minimum of 7 years) and make your choices as broadly diversified and as cost-effective as possible.
Now ask yourself:
Which of these 6 steps will be easiest for you to resolve?
Which will be the most difficult?
Does your financial professional keep you informed and set your mind at ease?
If you are 60 or over and have $2 million or more in investments, the Peak Wealth Planning team can assist. Schedule a call to learn more today.
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About the Author
Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind.
Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance and estate planning advice, Peak Wealth Planning is a fee only financial advisor based in Champaign, Illinois.