Virtually everyone will go through several financial stages in life. Some expected, some unexpected. While most people understand the basic need to save and plan for retirement, making key decisions when life takes a turn, or being prepared for life’s unexpected events are both important keys to a lifetime of financial peace of mind.
1. Career change and sabbaticals
Forty-plus year career paths don’t always follow a straight line. Whether it’s back to school, taking time off to care for family, for personal development or to take a shot at starting-up your own business, being financially prepared for a break or change in your career path can go a long way to helping make it happen when desired, or reduce the financial stress when it’s unexpected.
2. Making financial decisions on your own
Whether you become unexpectedly single or divorced, or your partner unexpectedly (or expectedly) passes away, financial stress can come from several directions. Do you have the full picture of your financial situation? Will you be able to handle household expenses or be prepared to make financial decisions on your own? In the case of the death of your partner, do you know what steps need to be taken with respect to settling their estate, or who can help? It can be uncomfortable to talk finances when it comes to these often unexpected situations, but they represent some of the most important reasons to have a comprehensive financial plan – that both you and your partner understand.
3. Business contingency and succession planning
Businesses succeed not because their owners are lucky to avoid disasters but because they were prepared for unplanned events. Contingency planning can help protect your business and your family when the unexpected occurs. A properly structured plan will generally include a leadership succession plan, an updated Will and estate plan, life insurance for liquidity protection and a detailed shareholder’s agreement. It’s also never too early to start business succession planning. Whether you plan to pass your business to the next generation or sell it outright, setting yourself and your business up for future success will require time, effort, and a comprehensive plan.
4. Income loss and increased expenses due to poor health
As people live longer and for long periods of time with health issues requiring additional care or financial support, income loss or ever-rising expenses due to health problems have become risks worth planning for. Living benefits insurance is a type of coverage that pays a benefit to you while you’re alive. Three distinct solutions – disability, critical illness and long-term care insurance –help ensure your financial stability by covering a wide range of expenses or providing income replacement due
to injury, illness or aging.
5. Creating a lasting family legacy
Passing on wealth to loved ones is an important goal for many people. Your Will defines who will inherit what, and a comprehensive wealth transfer plan is often needed to help ensure your assets are distributed as intended, pass quickly and discreetly, and taxes and costs are minimized. However, the greatest risk to your legacy may be failing to prepare your beneficiaries for their inheritances. Consider talking to them about the challenges you overcame to build wealth, how you would like them to manage their inheritance, or even passing on assets while you are alive to allow your heirs to benefit from your hands-on guidance. Trusted financial, tax and legal advisors may also be able to provide guidance and assistance prior to and after they receive their inheritance.