Planning for Life Events Part II

In the last part, we started a list of life events that require financial planning. Here are a few more events that will require help financially.

  1. 1.       You just got an inheritance. Unexpected money cannot only bring you a large sum, but questions on how to spend it, charitable donations, or tax payments. Getting professional help in figuring out what to do with it can be important when dealing with a large sum of money. Remember it is a large responsibility to take on any sum of money. Make sure you put it to work for you, instead of you working for it.


  1. 2.       And baby make three, or more. When you finally decide to start a family, you know that for the next eighteen years you have a responsibility to provide and care for that baby as it grows. You might want to think about starting a 529 account to help them pay for college, or post high school education. You will need to consider taking out insurance policies on the children and maybe start a savings account for them. There is much more to having children then picking out baby names and shopping for blue or pink. Planning for their future will help you plan for yours.


  1. 3.       You’re hired. Whether it is your first job, or fifth job, it is important to make adjustments each time you take on a new job. For you first job, you might want to consider paying for a onetime fee to a financial planner to help guide you during this key life transition. It may even be a good idea if you will experience a large pay raise with the new job.


  1. 4.       You are offered a generous severance package. Emotion can run wild when your employer offers a big severance package. It can be heart breaking to know that you put so much time into a company and they are wanting to cut ties, but at the same time, there are so many possibilities to consider. It is important to understand the complex financial issues associated with severances packages. Talking to a financial advisor before signing on the dotted line could be very beneficial. You need to understand if the package will be taxed immediately or if you will be responsible for moving the money in your retirement you’ve accumulated to another account. Understanding the fine print will make everything easier for you.


  1. 5.       You retire. Retirement is considered a pivotal financial moment in a person’s life. It is vital to plan for this moment. Financial planner encourage people to start planning for retirement in their 20’s and 30’ to ensure that you have enough money to make this major life transition. You spend your peak earning years saving for the last third of your life. Some people want to spend their retirement traveling; others will find themselves doing something they never planned for. Make sure you have enough money to cover what you want to do and the unpredictable life likes to throw you way.