8 Financial Planning Tips Planners Use Themselves

One of our financial planning tips is to maximize the amount your employer is willing to match in your employer-sponsored 401(k).

It’s been said that having a doctor, lawyer, and mechanic among your close friends can keep you from losing your shirt—not because of freebies or discounts but because of direct access to trusted wisdom. We think someone forgot to add financial planner to that list. Would you like to know how we handle our own financial planning? Wouldn’t it be nice to hear the financial tips we give to our clients, personal friends and relatives?

Consider it done. We’ve put our collective minds together to share the financial planning insights we regularly apply to our own lives. These eight financial tips reflect the same core advice we give to our own clients, friends and family:

  1. Make the most of matching
    Contribute enough to maximize the amount your employer is willing to match in your employer-sponsored 401(k).

  2. Use a Roth IRA
    If income limits don’t prevent you from doing so, use a Roth IRA to save for retirement. Want to contribute even more? Work with your financial advisor to re-evaluate your 401(k) or non-qualified account.

  3. Play catch-up
    The “catch-up” contribution option enacted by Congress allows people age 50 and better—that’s you, Baby Boomers—to increase annual contributions to 401(k), 403(b), 457, and IRA plans in case you haven’t yet saved enough to build a comfortable nest egg.
  4. Consider insurance supplementation
    Group life and disability insurance policies have various constraints that you might not even realize are in place. Take a look at yours and consider supplementing your group policy with an individual policy.
  5. Watch your asset allocation
    Lots of company 401(k) plans are based on a generic risk-tolerance questionnaire. This one-size-fits-all approach may lead to more conservative allocations than you need for prudent financial planning.
  6. Beware of target-date funds
    You’ll see these funds touted everywhere, but they are often overly conservative relative to an investor’s time horizon. If you have one, keep a close eye on it especially as you get closer to the target date.
  7. Address high-interest, non-tax-deductible debt first
    Simply put, this is the debt that wreaks the most havoc and wastes the most money over time. The sooner you can pay it off, the better.
  8. Don’t helicopter over your investments
    In other words, don’t try to time the market, don’t pay attention to your account too frequently, and don’t worry about the inevitable temporary declines in your account balance. Focus on long-term goals, not short-term price changes.

As you can see, our financial planning tips aren’t a matter of secret passageways and little-known loopholes from the finance underworld. They are rooted in sound financial principles aimed to keep your best interest at heart. Ready to talk to a financial planner about your financial goals? Contact us today to schedule an appointment. 



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