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Life is full of uncertainty, twists, and turns. However, while you may not be able to plan your life down to the minute, you can take steps to prepare for what is to come. In a survey by DHM Research, 67 percent of Americans revealed that they do not have a life plan worked out. As you move through life, begin a career, and start a family, naturally, you will begin to wonder about what is to come, and may even feel overwhelmed by it all in some moments. As a parent, you want to be assured that your family will be taken care of.
Get Your Financial Plan In Place
Finances are a large strain on many households. Around 62 percent of Americans are worried about retirement, while another 67 percent of households don’t bother to create a household budget. Yet these small financial steps can make a huge difference to your family’s financial future and key decisions you will have to make, including how to fund your child’s college education, when to retire, and how you will afford your retirement lifestyle or end of life care.
As a general rule, always aim to spend less than you earn. Take the time to create a household budget immediately, and find areas where you can cut back to create savings. Redirect these savings into executing wise financial planning decisions for your family like building an emergency fund, securing life and long term care insurance, and building up your retirement accounts. If you are confused about how much you should be saving, check out the various online resources that give insight into how much you will need. For instance, the latest estimates by retirement experts say the average amount needed for retirement is 80 to 90 percent of your annual pre-retirement income, or 12 times your pre-retirement salary.
Keep The Lines Of Communication Open With Your Family
It is also important to make the planning process an inclusive one – particularly as your children grow older. Some key topics families should talk about include life insurance, end of life wishes, emergency plans, and estate planning. To make the process easier, choose the right time, and encourage questions. Younger family members will undoubtedly have a lot of questions. Be ready to answer them.
Before starting the conversation, take the time to get the facts. For instance, before speaking about estate planning, you may want to consult an estate planning attorney to understand the options available to you and your family, such as choosing a power of attorney or will planning. Finally, remember to keep talking. Encouraging your family to have regular conversations about future life plans makes it easier, and allows you to have an ongoing dialogue in case you change any of your life plans.
Be Open About End Of Life Care
While it is unsavory to think about, there will come a time in your life when your children are all grown up, and it is time to make those difficult end of life decisions. Some seniors opt to move in with their children to provide the additional assistance they come to depend on. Others choose to live in a long term care facility or senior retirement community. Think of how you wish to spend those later years before making provisions for them. Are you planning to downsize to a senior-friendly home? If so, it is a wise move to set a timeline to begin looking at the cost of senior retirement apartments and get your finances for the move. Similarly, if you wish to remain in the comfort of your current home, you may need additional in-home help. Keep this in mind when drafting your retirement budget.
While you can’t predict the exact way life is going to go, you can prepare yourself and your family. Tackling big life decisions like your future post-career or end of life care may be difficult, but it is necessary to bring peace of mind. Focus on the big priorities first, and above all, don’t feel pressured to get it done all at once.