A lot of important events in life happen when you least expect them. However, in many cases you are aware of most events well in advance, and planning for them straight away is the best way to manage your finances.
Tying the Knot
Getting married is a joyous occasion, but entering it unprepared can create unnecessary issues for the future. A prenuptial agreement may not sound romantic, but it can help protect any assets from either side accumulated before the wedding, as well as make sure there are no misunderstandings in the future.
Once the knot is tied, big ticket items such as buying a house should be approached as a joint effort with your partner to determine the best investment strategy. Believe it or not, this is also the best time to review your will, pension arrangements, as well as health and life insurance for the both of you.
A Baby Makes Three
Having a baby is one of the best things that will ever happen to you, but it is also the one thing that will most dramatically affect most aspects of your life. While college might be nearly two decades away, it is never too soon to open a 529 account and start saving. Even a small contribution each month can grow and secure a good foundation for your child’s future education.
Time to Retire
It is never too early to start planning for retirement. If you are working with a financial advisor, chances are they have urged you to start saving in your early 20s. Switching from the accumulation of funds to their withdrawal and spending is a shock to anyone..
Once retirement comes and that regular paycheck is gone, you need to take careful stock of your current situation. This means evaluating your income, life expectancy, and expenses. It may seem depressing, but you really need to budget carefully at the start and track all of your account withdrawals. Depending on the plan you decided on, there is usually the possibility to take a tax-free lump sum and reinvest part of it to generate income.
Taking a proactive approach and adjusting your investments and finances as these major changes impact your life will keep you prepared for anything else life might throw your way.