We all know that we need to plan for our financial future. Sometimes, though, the thought of even getting started can be overwhelming, and cause people to put it off. When it comes to planning, time is the best friend of your money, so it’s important that you start planning as soon as possible. Let’s look at some basic tasks you should be tackling to give yourself a more solid financial foundation.
Investing in your employer-provided retirement plan is one of the simplest steps you can take. Since your contributions come directly out of your paycheck, many people find it easier to save because they don’t actually have to write a check, and the savings feels more automatic.
If your company’s plan offers matching contributions, you’ll want to be sure to contribute at least enough to take advantage of the full match. The company match is free money and is often as much as an extra three or four percent of your earnings!
If you’re confused about which investment options to select within your plan, speak with your financial advisor who can help you make sense of your choices. If you don’t have an advisor, many plan providers will offer one-on-one consultations over the phone, or at your worksite. You may also want to consider the so-called “target date funds” that many plans now offer. These funds are intended to become less aggressive as your get closer to retirement, and can be a good choice for people who want a simple solution.
Each time you get a pay increase, consider increasing the percentage of your salary that goes into your retirement plan. Doing this before you’ve allocated these new funds to your budget, can help you put more away without noticing it.
While saving for retirement is an obvious need, protecting what you’ve got is often overlooked. When we feel healthy, the thought of a long-term disability or premature death seems like remote possibility. Insurance certainly isn’t sexy, but it’s a necessary part of your financial plan.
Your employer may offer long-term disability and life insurance coverage at rates that may be less expensive than a policy you could purchase privately. Review these coverage options and select one that protects your income stream from the possibility that your become unable to work. Likewise, explore life insurance options that protect your family in the event of your premature death.
If your employer doesn’t offer adequate insurance coverage, then work with an independent insurance agent who can help you explore options that fit you needs and your budget.
Employers continue to recognize the importance of workplace benefits in the lives of their employees, and often provide important options that you may not even realize are available. Take the time to discuss with your human resources team to find out what you may be missing. These options can go a long way toward helping you create a firm financial foundation.
Stephen Kyne is a Partner at Sterling Manor Financial, LLC in Saratoga Springs. Securities offered through Cadaret, Grant & Co., Inc. Member FINRA/SIPC. Advisory services offered through Sterling Manor Financial, LLC, or Cadaret Grant & Co., Inc., SEC registered investment advisors. Sterling Manor Financial and Cadaret Grant are separate entities
