Too often people avoid thinking about their long-term finances. Perhaps they look at the near future to plan for a vacation or the purchase of a luxury item. Planning for your financial future is often ignored, but the consequences of not paying attention to your future finances can have serious consequences. The following are three of the most serious situations that everyone or their loved ones may face.
Your family may struggle financially after your death
No one likes to think about their death, especially when they are still young, but an untimely death can have serious consequences to a surviving spouse and children. Few people have enough investments to support their family at the economic level they are accustomed to. Life insurance is the best way to protect loved ones from economic hardship, but many men and women are underinsured. The best way to address this is to have a professional review your insurance needs and compare that with the insurance you currently have.
Economic hardship during your retirement
Most people underestimate how much money they will need to have the standard of living they expect after their working years. In addition, people are living longer now, so it is quite possible to begin to run short of retirement money towards the end of your life. Realistic expectations can be understood by a consultation with a professional retirement investment advisor.
It is also quite possible to lose much of your retirement money with poor investments before you retire. For example, if you have too much money in the stock market and the market drops as you near your retirement, you could lose a large percentage of your nest egg. Professional investment planning will include a balanced investment portfolio that protects your retirement money.
Your loved may not inherit your wealth
Even if you have protected your family during your working years and saved plenty for your retirement, if you have not spent time planning your estate, all of your wealth can easily be fought over and wasted after your death. Often the people you wanted to receive the bulk of your wealth will have to share it with others. It is also common for taxes to be much higher for heirs without proper estate planning. Much of this can be avoided with proper financial planning. This includes a will and perhaps a living trust.
Although the consequences of poor or non-existent financial planning are dire, the good news is that it can be corrected by consulting with professionals, but do not put this aspect of your personal finances off. Take action today.