Guest Post By: Poppy Williams
Retirement and Estate Planning Guidelines for Your 20s and 30s
When you’re in your 20s or 30s, retirement is probably the last thing on your mind. However, with inflation rising and the future uncertain, thinking about your future now and taking concrete steps to secure it is a smart move. In fact, the earlier you begin saving, the better off you’ll be during your retirement. This guide from Legacy Planning provides suggestions on retirement and estate planning for those in their 20s and 30s.
Have a Vision
To begin planning, you need a goal. What kind of lifestyle would you like to have after retirement? When would you like to retire? You must have a clear future vision so you’ll know the steps you need to take to get there. If you are unsure, book a session with a coach who works with financial planners and estate attorneys as one option in finding your clarity.
Gather Your Vital Documents
Organizing all your important documents, such as insurance policies, wills, and property deeds, is vital for ensuring peace of mind and efficient management of your personal affairs. If you are the first in your family to explore these documents, congrats on being the pioneer in personal agency. Utilizing PDFs can enhance this process by ensuring documents are preserved in a consistent format, making them easy to share and view across different devices. Online tools can help you password-protect your PDF files for added security, safeguarding sensitive information from unauthorized access. Click for more tips on optimizing your document management strategy in today's digital world. The earlier you start, the easier it will be just in case an emergency comes up where you will thank yourself later.
Estate Planning
Estate planning is a critical part of future planning. The truth is life is uncertain. With estate planning, you can take the pressure off of your family in the event of your incapacitation or demise and have your affairs handled according to your wishes. Good estate planning helps secure your loved ones’ future. Here are some (but not all) areas covered by an estate plan:
● Your first will: you can name beneficiaries for your assets, name guardians for your children, and more, as well as any wishes you may have regarding an estate sale.
● Trusts for children: you can create a trust that invests your money, builds it up, and leaves a sizeable corpus for your child or children.
● Power of attorney: you can appoint someone to make legal decisions on your behalf.
● Advance directives: in the event of your incapacitation, you can appoint someone to be in charge of managing your health.
For bespoke legacy planning services for high net worth individuals, contact Legacy Planning today because your legacy is more than just legal and financial documents, it's living your life to the fullest now based on your values and building identity capital in your 20s and 30s!
Take Advantage of Employee Benefits
If you are an employee, even of a family business, many employers offer perks that can help you meet your retirement goals. For instance, you can expect 401(k) retirement plans, pension plans, life insurance, stock options, healthcare, and more. You should get in touch with your boss or HR department to check what you’re eligible for. Be on the lookout for extra perks like 401(k) matching, discounting stock purchasing, and insurance for your family. While this might feel overwhelming, one of the eight wonders of the world is compounding interest.
Whittle Away at the Debt
Paying off your debt should be a top priority if you have college loans, credit cards, a car note or any other obligations; debt is a constant drain on your income and will get worse if not kept in check. Look into creating an income-based repayment plan that allows you to live sustainably (and well within your means) until it’s gone. Once your high-interest debts are eliminated, you can begin to quickly build home equity through the purchase of your first real property as an asset. Minimize the use of credit cards and personal loans if it is possible so that interest payments at 15-20% don't keep you trapped in the debt cycle of stress.
Start Saving Now for Compounded Interest
Compound interest can be your best friend in securing your financial goals; it adds to your investment over time. For example, if you invest $1,000 at 1% annual interest rate, you will end up with $1,010 at the end of the year — if left untouched, it will grow to $1,020.10 after 2 years. After 30 years, it will be $1,347.85; you receive an extra $347 as the interest compounds on your initial investment. Time acts as a money multiplier here, turning small amounts into something truly astronomical (interest rates can be significantly higher in the real world, and you typically keep adding to your initial investment).
Build an Investment Portfolio
An investment portfolio is a group of diversified investments that help you build up your wealth. This can include anything from stocks and bonds to real estate and material possessions (like a stamp collection). These days, thanks to “Robo-advisors,” it’s very easy to create a strong portfolio even if you’re not the most financially literate. Investor Junkie explains these are online tools that can help you invest your money, offering suggestions and helpful information as necessary. Educating yourself about investments is still essential, though.
Planning your retirement and estate early will pay off. Not only does it put you in a stronger position financially, but it also gives you peace of mind knowing your life is in order and that your loved ones will be taken care of should an untimely event come to pass.
One of the keys to a meaningful legacy is ensuring that your foundation is set in place, so you can live with less fear and less of a survival mode. Oftentimes, young adults are expected to understand how to create their foundation but yet, no one talks to them about it enough to offer support and an open space to ask questions. We can't presume today's NextGen know what is best in a world of commercial offers and advertising of endless products.
Yet, if you can exercise your leadership capabilities in this area, your legacy plans will fall into place much easier and with grace for the years to come. A great legacy happens month by month over time as an investment in yourself, your future and your best potential.
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Learn more about Poppy Williams by email: info@techbizguide.com
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