What’s typical in this stage: Accumulating assets and Planning for the future.
In our 30s to 50s, we are in the middle of our careers and accumulating assets. If we’ve followed the waterfall plan, we’ve built an emergency reserve, a retirement account, and a few savings accounts to accomplish short and long-term goals. Now is the time to get serious about planning. The first step is to build a Statement of Financial Position: Essentially a list of all our assets and liabilities. InvestorKeep does this automatically with all accounts added to the Platform.
Three necessary aspects of financial planning at this stage are Risk Management, Short Term Savings, Investment Goals & Debt Management, and Long Term Savings and investment.
Risk Management: An annual meeting with a financial professional will serve to evaluate needs for personal insurance. This is a list of insurance that can reduce your life financial risks.• Life Insurance
• Health Insurance
• Disability Insurance
• Long-Term Care Insurance
• Homeowners Insurance
• Auto Insurance
• Liability Insurance
Short Term Savings, Investment Goals, & Debt Management: An annual review with a qualified financial professional can help ensure the adequacy of your emergency reserve fund. As your non- discretionary income increases, so should the size of this account. Review the portion of your income you are spending on your house payment to ensure it is in line with your financial position. Review the amount you spend on debt other than housing to ensure it is sustainable to meet your financial goals. It’s important to discuss the trade-offs between paying down debt and adding to savings and/ or investment accounts.
Long Term Savings and Investment: An annual review with a qualified financial professional will help evaluate retirement goals and the likelihood of achieving them. Review progress toward education funding goals and large purchase goals. Additionally, this is the time to discuss legacy goals, and this should include financial contributions and documentation (wills, trusts, etc.).