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From your late 20's through your early 40's, not only are you in your prime earning years, but you are also in a very busy and very financially important phase of life. You are probably either recently married with maybe a child on the way or thinking about how you’ll send your kids to college while still being able to plan for your own retirement. This is the time to take a good look at and make some serious plans to prepare for future college costs for your children, retirement planning, and creating a family legacy.
Today’s Millennials are most likely to be earning more and saving more money than their parents. In order to be sure that you take advantage of your earning potential and to protect your savings, there are three financial hacks that you need to consider:
Many of us focus so much on rate of return. We believe that rate of return is the only accurate measurement of how well one is doing financially. Don’t get me wrong, we should pay attention to it but recognize that chasing it is a limited strategy. You don’t control the rate of return at the end of the day. A much better indicator of financial health that is 100% within your control is the rate at which you save. Our experience tells us that a healthy savings rate is far more important. The goal is to become a world class saver, which is someone who saves between 15% and 20% of their gross income. Once your savings rate is in that ballpark you know you are on the right track financially.
What is your greatest asset? Most people think it's either their car, their house, or even their baseball card collection. The truth is, your greatest asset is your ability to wake up, go to work and earn an income. What would happen if you suddenly became disabled and could no longer work? A car accident, sports injury, or something out of your control could negatively impact on your ability to work. Having disability insurance can provide income at a time when you are not able to work and can help protect your savings and financial security.
Whole Life insurance can benefit you NOW and LATER. Not only does Whole Life Insurance provide financial protection for your family should you pass unexpectedly, it also provides diversification to your portfolio and acts as a forced savings account. As you pay for your policy, your cash benefit builds tax-deferred. This cash can be used as collateral for a loan. Premiums are guaranteed to never increase and the death benefit is permanent.
Term life insurance will only give you coverage for a limited period of time but it can provide an affordable option for those not able to commit to permanent insurance. Some term policies can be converted to permanent life insurance, also.
Take advantage of Individual Retirement Accounts (IRAs) and 401k employer sponsored plans. You can contribute up to $6,000 annually to an IRA (as of 2021) which may be tax deductible. If your employer offers a 401k program, contributions up to $19,500 (in 2021) will not be includible in your taxable income. This can potentially place you in a lower tax bracket for income tax purposes. With IRA contributions you need to be aware that there may be certain limitations that may apply if you exceed income limits or your employer provides a retirement plan.If your employer offers contribution matching, be sure to look into it. This can double your contribution and your savings will grow even faster!
To make the most of your prime earning years. An experienced advisor can help you maximize your savings and earning potential and help you reach your goals of a secure financial future while still living your best life today.
Disclaimer: Whole life insurance is intended to provide death benefit protection for an individual’s entire life. With payment of the required guaranteed fixed premiums, you may receive a guaranteed death benefit and a guaranteed cash values inside the policy. Some whole life policies don’t have any cash values in years one or two. Whole insurance should be considered for its long-term value. Early cash value accumulation and early payment of dividends depends upon policy type and/or policy design, and cash value accumulation is offset by insurance and company expenses. Consult with your Guardian representative and referred to your whole life insurance illustration for more information about your particular life insurance policy.