Top Strategies To Prepare for Your Financial Future


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Whether you are a young professional in your first job or have been part of the workforce for many decades, planning for your financial future should be one of your top priorities. The steps you take when you are young can provide peace of mind, enable you to build a comfortable financial cushion for your retirement years, and ensure that your hard-earned money passes into the hands of your loved ones when you eventually leave this world. The bottom line is that it is never too early to start planning for the future.

Take Advantage of Employee Programs

Many employers offer a 401(k) plan as part of their standard benefits package. If your company provides this investment option, you should participate. This type of retirement account makes investing easy and painless. First, because you can invest pre-tax income, you’ll save money when you file in April. Second, the funds are diverted directly into your 401(k) before your paycheck is even cut. Thus, once you’ve elected to invest, everything becomes automatic, and there are no extra steps for you to take.

When deciding how much to invest, it’s best to look at what your employer is willing to match. Then, the most strategic move is to invest at least that amount. For example, if your firm matches up to 5% of your salary, you should invest at least 5%. If you invest less than the offered match, you miss out on free money.

Invest in an IRA

If you are self-employed or your company doesn’t offer a 401(k) plan, an individual retirement account may work for you. An online brokerage firm can help you set up an IRA and educate you on the contribution and distribution rules.

There are two types of IRAs to consider. If you choose a traditional IRA, your contribution is tax-deductible at the time of the investment, but your future earnings will be taxed when you withdraw the money after retirement. Conversely, if you choose a Roth IRA, your contribution is taxed up-front, but your long-term earnings are exempt from future tax. This particular investment works especially well for young people because they have years ahead of them for their investment to grow.

Use Professionals for Your Estate Planning

Working hard and taking all the right steps to ensure your financial security is only one piece of the puzzle. You also want to ensure that your hard-earned assets pass seamlessly to your surviving loved ones when you pass away. To do this, you’ll need an estate plan.

Start by contacting an experienced law firm, such as Tully Rinckey, to draw up the necessary documents, including:

  • A will that allows you to direct the allocation of your assets to designated beneficiaries, appoint guardians for minor children, name an executor, and even provide instructions for your funeral
  • A trust (which can be a living trust or a testamentary trust) that provides for the transfer of assets to a legally-appointed trustee who ensures they are distributed according to your wishes
  • A healthcare directive and living will that ensures your medical intervention preferences are understood and followed

Drawing up an estate plan with the Tully Rinckey professionals ensures that your intentions and wishes are clearly delineated and reflected in legal paperwork. Moreover, knowing that you and your loved ones will be protected when the time comes gives you peace of mind.

There is no better time than right now to plan for your financial future. By investing in your retirement and drawing up legal documents to protect your assets and your loved ones, you can enjoy the peace that comes with knowing you are prepared for whatever life brings.