How to Plan for Retirement in Your 20s November 1, 2023 For some people, planning for retirement in your 20s seems like a distant goal, something for your future self to deal with. Your 20s tend to be about building your career and having memorable experiences. The future may appear far off, but it’s never too early to start planning for retirement. In fact, your 20s are the perfect time to begin! 1. Build an Emergency Fund First Before diving into retirement savings, it’s important to build up your emergency fund. This fund serves as a safety net for unexpected expenses like medical bills, car repairs, or job loss. Aim to save at least three to six months’ worth of living expenses. Having an emergency fund ensures that you won’t have to dip into your retirement savings prematurely in case of financial setbacks. 2. Pay Off Any High-Interest Debt High-interest debt, such as credit card balances, can be a significant barrier to saving for retirement. The interest on these debts can quickly accumulate and erode your financial stability. Focus on paying off high-interest debts as a priority. Once they’re under control, you’ll have more disposable income to allocate to retirement savings! 3. Create a Plan Now that you’ve built up an emergency fund, you can start planning! The sooner you start planning for retirement, the better. Figure out your retirement goals by considering factors like when you want to retire, your desired lifestyle in retirement, and estimated expenses. Having a clear plan will keep you motivated and on track. Once you’ve decided on your goals, you can determine how you’re going to set up your retirement fund. 4. Do Not Pass Up an Employer Match If your employer offers a 401(k) plan with a matching contribution, take full advantage of it. Think of it as free money for your retirement! Contribute enough to maximize the employer match. If your employer doesn’t offer a 401(k) matching benefit, consider opening a Roth IRA. Roth IRAs allow your contributions to grow tax-free, and you can withdraw your contributions (not earnings) penalty-free in case of emergencies. 5. Consider Investing Once you’ve established your retirement account, consider investing your contributions. Investing allows your money to grow over time, thanks to the power of compound interest. While investing carries some risk, it has historically provided higher returns compared to a traditional savings account, especially long term. By diversifying your investments across different account types, you can reduce risk and potentially maximize returns. 6. Consider Life Insurance Life insurance is often overlooked when planning for retirement, but it can play a crucial role in ensuring financial security for you and your loved ones. Now is an excellent time to evaluate your life insurance coverage. Premiums are typically lower the younger you are and you may have more accumulated cash value the longer you keep your policy. Remember, life insurance isn’t one-size-fits all; there’s several options to choose from, like Whole Life, Term Life and Universal. Talk to your local OKFB agent to determine which option is right for you. Remember that the key to planning for retirement in your 20s is consistency. Even small, regular contributions can grow significantly over time. The power of compounding can turn modest savings into a substantial retirement plan. Starting early will give you a significant advantage, allowing you to enjoy a financially secure retirement when the time comes. Your future self will thank you! We’re Here to Help Whether you’re a longtime policyholder or just starting to look for insurance options, we’re here to help. If you have questions or concerns that you want to discuss, connect with your local OKFB agent today. If you have any insurance-specific questions, we would love to help you find the coverage that best meets your home, auto, commercial and life insurance needs. Don’t forget to follow us on social! This kind of information and more is just a click away. You can find us on Facebook, Instagram and LinkedIn.
How to Plan for Retirement in Your 40s November 1, 2023 When you’re in your 40s, you probably have potential to save more for your retirement. Your financial goals may shift, with saving for retirement taking precedence over building an emergency fund. The Federal Reserve averages savings for the middle age group at $27,900, with the median savings at $4,710. If you feel behind on your retirement planning, don’t worry! Keep reading for more tips for saving for retirement in your 40s. 1. Assess Your Retirement Goals As you approach retirement planning, it’s crucial to think about what life will look like when you’re retired. Your retirement intentions can significantly influence how you approach the last decade or so before retirement. Consider questions like: Where do you want to live? What hobbies and activities do you want to pursue? Are you thinking of downsizing your home? By figuring out your retirement goals, you can better tailor your savings strategy to meet your unique aspirations. 2. Estimate Your Retirement Income Take a comprehensive look at all your potential sources of retirement income, including your 401(k), IRAs, and any other investments. Ensure that these income streams align with your anticipated retirement expenses. If there’s a gap between what you have and what you need, consider making adjustments. If you’re not sure where to start, consider checking out our financial services! 3. Take Advantage of Tax Deductions The government encourages retirement savings by offering tax advantages. Contributing to a traditional IRA, for example, allows you to defer tax deductions, reducing your taxable income for the year. Keep in mind that this income will be taxed when you withdraw it in retirement, but the tax benefits can be substantial in the short term. (If you’re 50+, you may be able to use catch-up contributions on your 401(k)!) 4. Invest in Non-Retirement Accounts While retirement accounts offer tax advantages, they come with contribution limits. Once you’ve maximized your tax-advantaged retirement savings, consider investing in non-retirement accounts. Diversify your investments to mitigate risk and potentially earn higher returns. Non-retirement accounts offer more flexibility, allowing you to access funds before retirement without penalties. 5. Consider Life Insurance Life insurance is often overlooked when planning for retirement, but it can play a crucial role in ensuring financial security for you and your loved ones. Now is an excellent time to evaluate your life insurance coverage. Ensure that it’s sufficient to protect your spouse or partner’s quality of life through retirement if either of you were to pass away. Life insurance isn’t one-size-fits all; there’s several options to choose from, like Whole Life, Term Life and Universal. Talk to your local OKFB agent to determine which option is right for you. Saving for retirement may feel like a daunting task, but with careful planning, you can take significant steps toward securing a comfortable and financially stable retirement. Remember that it’s never too late to start, and by following these steps, you can build a stronger financial foundation for your future! We’re Here to Help Whether you’re a longtime policyholder or just starting to look for insurance options, we’re here to help. If you have questions or concerns that you want to discuss, connect with your local OKFB agent today. If you have any insurance-specific questions, we would love to help you find the coverage that best meets your home, auto, commercial and life insurance needs. Don’t forget to follow us on social! This kind of information and more is just a click away. You can find us on Facebook, Instagram and LinkedIn.
3 Ways to Set Your Child Up for Financial Success September 7, 2023 As a parent, you want nothing but the best for your child. One of the most important gifts you can give your children is a secure and promising future. It’s never too early to start investing in their future, so here are three ways to set your child up for financial success: Life Insurance Life insurance might not be the first thing that comes to mind when thinking about setting your child up for success, but it can provide an essential safety net. Securing life insurance for your child while they are young and healthy can lock in lower premium rates. This coverage can continue into adulthood, ensuring they have access to affordable protection as they embark on their journey toward success. Life is unpredictable, and during unfortunate events, life insurance can help cover funeral expenses, medical bills, and more. Additionally, some life insurance policies have an investment component that can grow over time, providing a financial cushion for your child’s future. College Funds Investing in your child’s education is one of the most impactful ways to ensure their future success. The cost of education is a growing expense. Setting up a college fund can help you create a savings strategy to help your child during their college years. We offer a few options for college funds. For example, the 529 Plan is a tax-advantaged education savings plan in which you select options to invest in. These assets can then be used to pay for qualified education expenses at any eligible educational institution. Talk to your local OKFB agent about our financial services to get started. Estate Planning Estate planning is a comprehensive approach to ensure that your child’s future is secure, no matter what life throws their way. This option involves preparing for various scenarios, including unforeseen incapacitation or unfortunate events, like a parent’s passing. During the process, your advisor may suggest you work with an attorney to draft important documents that will make decision-making easier for your loved ones. For example, determining financial and medical powers of attorney, guardianship documents to designate caretakers for your minor children and a will to outline what you’d like to have happen to your assets after your death. Life is complicated and unpredictable, but taking steps now to set up your child for financial success can bring some peace of mind. Plan now for your child’s next phase in life by setting them up for success. We’re Here to Help Whether you’re a longtime policyholder or just starting to look for insurance options, we’re here to help. If you have questions or concerns that you want to discuss, connect with your local OKFB agent today. If you have any insurance-specific questions, we would love to help you find the coverage that best meets your home, auto, commercial and life insurance needs. Don’t forget to follow us on social! This kind of information and more is just a click away. You can find us on Facebook, Instagram and LinkedIn.
Tips for Merging Finances after Marriage January 31, 2020 As the month of love, February is a great reminder of how special love can be, no matter the form it takes in life. One of the most exciting forms for love is marriage, which is exciting but can also bring with it some challenges. Joining lives with someone typically requires some changes, especially when it comes to merging and managing finances. Financial decisions can directly impact your future together, so creating a thoughtful plan and communicating well about finances is key. In honor of the month of love, we’re sharing some tips for how to successfully merge your finances and insurance after marriage. Discuss Goals Sharing goals is the first step in planning a solid financial future. Start with a list of goals, both short-term and long-term. After establishing a list of goals, decide which items are most important to both of you. When you’ve set priorities on goals, then you can focus on accomplishing them. Prepare a Budget Next, set a reasonable budget together. Start by identifying required expenses and then give yourself an amount for unplanned expenses. If your expenses are exceeding your income, determine where you can cut back. Decide how you want to approach managing your finances. If both people want to be involved, be sure to use a system that works for both parties. Decide on Accounts You’ll have to decide whether to combine bank accounts or keep them separate. Weigh the pros and cons of each and consider what will work best. A joint account is beneficial in easily keeping records and lower maintenance fees. Separate accounts may be more beneficial in keeping track of how much money is in the account at all times, as just one person is withdrawing. Consider Your Debt If you’re considering adding your name to your spouse’s credit accounts, think thoroughly. Joint credit means both parties are responsible for the debt and it can negatively impact the credit rating if one person has poor credit. Additionally, make sure to consider any debt, either from student loans or elsewhere, when planning your joint budget. Combine Insurance You and your spouse likely already have your own insurance coming into the marriage, whether it be auto, life, etc. You’ll want to examine both policies and decide if it will be more beneficial for you to keep separate policies or get on the same plan. Bundling multiple cars with one insurance provider may make you eligible for discounts and can make managing policies easier. As you work through this new chapter in life, consider visiting with a financial adviser to help you along the way. If you’re an OKFB member, your member benefits provide you with multiple insurance and financial services. Contact an agent to receive guidance through merging insurance, or use the banking and financial services from Farm Bureau Bank.
