Five easy steps towards a bright financial future

Balance Risk and Reward and Don’t Skimp on Education

It has been said that anyone who earns an income and pays bills does financial planning. True, perhaps,but only in the broadest sense. When you delve into the details, you find that long-term planning is really about balancing risk and reward and being an educated consumer. Here are five tips to consider:

1. Plan, Plan, Plan
   Most people spend more time planning their vacation than they do planning their financial future. To the extent most people have done any planning, it's typically been on a piecemeal basis. Usually they receive different advice from different people at different times, with no one connecting the dots to what the others may have done. Have one person in your household act as coordinator and catalyst, and have one cohesive plan that you re-evaluate regularly
2. Save, Save, Save
   The general rule is to save 10% percent or more of your gross income monthly. After setting aside three to six months income in liquid assets or cash as a cushion for emergencies, a fixed amount should be saved for long-term needs such as retirement.
3. Find More Baskets
   You know the old adage, “Don’t put all your eggs in one basket." Diversify your assets and investments. Relying on any one investment for your financial well being is dangerous. Make sure you have a balanced portfolio with varying degrees of risk in investments that are appropriate for different life stages. Of course, diversification does not assure a profit or protect against market loss.
4. Protect Yourself
   Your most valuable asset is your personal earning power. When you’re healthy, you are probably thinking of the next promotion, your dream vacation home or your child’s education. But an illness or disability can suddenly change everything. How will you pay your mortgage and medical bills if you can’t work? Group disability insurance—the one you get typically through your employer-- is seldom adequate for a long-term illness and goes away if you lose your job. Individual disability insurance, which you buy yourself is "portable," and benefit payments are income tax free under current tax laws*.
5. Protect Your Loved Ones
   Only 44% of households have individual life insurance with half saying they need more life insurance, and 30% having no coverage at all, according to trade group LIMRA in 2010 . None of us like to imagine our families without us, but it is a reality that people all too often ignore. If you only have group life insurance through your employer, you may be at risk. If you lose your job, you are no longer insured and life insurance becomes more costly as you age. Don’t put your family at risk. If you buy permanent life insurance, it can also provide cash value accumulation.

Start planning today! Call a New York Life agent to begin.