April is also known as tax season. You are required to go through your finances and income for the year, and report it to the IRS. This is often a time of awareness and understanding for many Americans. For much of the year, many Americans simply cash their paycheck and pay their bills. They may not pay much attention to how much they are making or what they are dishing out. This can be a huge financial mistake. Financial planning is important to a healthy financial future. Financial planners can help with the following tasks, making not only tax season easier, but preparing you for a better financial future.
When tax season comes, you often need to gather multiple documents. You not only have to report to the IRS how much money you made that year, but also any losses. If you will be deducting any business expenses, you will also need to claim these. Other special circumstances may also require special filings, including child support, estates and trusts, or business ownership. Financial planners can help someone manage their documents throughout the year and then file appropriately come April.
Too many Americans do not save properly for retirement. Come retirement age, they are forced to work or cut down on their belongings. If a healthy problem arises, they may find themselves in financial trouble. Financial planners can help establish a retirement account and ensure that it is being properly funded. Even if you have a 401K retirement account through work, this may not be enough. It can be helpful to diversify your finances. For example, you can save up to $5,500 per year in a traditional or Roth IRA, and an additional $1,000 if you are over 50. The Roth IRA has many additional benefits, over the traditional IRA that you likely have with your employer.
Unexpected or emergency planning
It is also not enough to simply plan for retirement. You can calculate how much you will likely need in terms of rent, medical care, and food during your retirement years. However, financial planners will also recommend contributing to an emergency savings plan. The average total medical expenses for a 65 year old couple will be $218,000 over a 20 year period. If you fail to plan for additional medical costs or unexpected costs during retirement, you could be left financially unstable. There are different types of financial services available. Financial planners for retirement purposes are one of the most common and most beneficial types of services offered.
Life insurance planning
Do you have money saved to cover your debt and funeral expenses, should something happen to you? Will your loved ones be left with the high costs? This is an all too common situation, as not enough people properly plan for life insurance. Many people do not purchase life insurance because it is either too expensive, or because they simply do not want to think about it.
However, your financial service company will inform you that life insurance is actually very affordable. Approximately 83% of consumers say they do not purchase more life insurance because it is too expensive, but consumers believe life insurance costs nearly 3 times the actual price. Protect your loved ones with an all inclusive life insurance plan.
College and children expenses
A lot of Americans put off financial planning for retirement because it seems so far away. Yet, many Americans also do not have enough money to properly care for or send their children to college. Working with a financial planner can help prepare for the high costs of children. Financial planning options include setting up trust funds or college expense funds for children under the age of 18.
A large percentage of the country is unaware of important financial planning steps. Financial planners can be useful in establishing retirement needs, setting up emergency savings accounts, and preparing for the cost of children. When you fail to prepare financially for the future, you are putting you and your family in a dangerous place. Utilize the services of a financial planner to provide you with a safe future.