You've worked hard to build your nest egg, and by planning today, you can protect your wealth for tomorrow.
By taking advantage of a few strategies, you can gain peace of mind knowing that you have taken the necessary steps to secure your future, avoid financial stress, and protect your assets.
This email is Week 3 of New Year, More Money, Personal Finance Insider's four-part series to help you set yourself up to build wealth in 2023 and beyond.
Read last week's email here.
1. Insurance
Insurance is an important wealth protection tool that should be included in your financial plan. If you are faced with unexpected illness, disability, or even death, insurance provides ways to cover and continue to pay living expenses. A variety of insurance policies exist to protect against a negative life or medical situation. Here are a few options to consider:
Life insurance: protects the financial stability of your family by giving them a tax-free payment in the event you pass away. When purchasing, consider your standard of living and financial situation.
Disability insurance: If you are faced with a situation like injury, serious illness, or a mental health issue where you are unable to work, this coverage provides a monthly payment that replaces your income during that time.
Long term care insurance: provides a monthly payment if you become unable to care for yourself due to an accident, illness, aging, or mental health impairment. It also covers costs associated with obtaining assistance to manage daily living activities.
2. Financial planning
Your financial future starts with a financial plan: a summary of your financial goals and the strategies developed to achieve them. A financial plan also helps you understand your financial situation and your short and long-term goals and will lay out what action steps you need to take as it relates to:
• Retirement planning
• Investment advice and management
• Budgeting
• Education savings
A plan also provides peace of mind because it identifies risks, allows you to see if you are veering off track, and can put plans in place to safeguard against financial disruptions.
3. Estate planning
Detailed estate planning and the drafting of your will is an essential part of a financial plan. Estate planning is a process that can help you answer questions like:
• Can my assets be easily located?
• What happens to my wealth when I am gone?
• How can I preserve my wealth for my family?
• How do I ensure my wishes are carried out after my death?
Estate planning is an ongoing process and the best time to get started is when you are in good health. It can be revisited and updated as your circumstances change and your assets become more complex.
There are several ways to protect your wealth, but financial planning, the right insurance coverage and estate planning set a solid foundation for financial security and stability.
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