Family Financial Planning

Family financial planning is an important step towards guaranteeing the financial future of your family. There are many ways that family financial planning can be successfully implemented and many resources to help along the way. If you are new to parenthood and would like to ensure a successful future for your family, talk to an investment advisor about the options available to you. From buying a home to saving for college, financial advisors can provide excellent advice and show you how to meet your goals.

The three most important investments anyone will make are college savings, planning for retirement, and life insurance. If you have these three items included in your financial planning portfolio, you should be in excellent financial standing. There are many programs available for college and retirement, and hundreds of life insurance options on the market today. With a little help from an investment advisor, you can choose the right programs for your family while staying within your budget.

Planning for College

College financial planning is an important step in family financial planning. It is never too early to start planning for your child's college future. The two most popular academic savings plans are the 529 plan and the Cloverdell ESA. The 529 college savings program is a program that allows people to contribute tax free contributions to an investment option for the child of their choice. These plans are sponsored by the states and anyone can participate. You can even invest in a program that is not in the state you live in. The earnings from the investments are also tax free if used for approved college expenses.

The Cloverdell ESA program is a family financial planning program in which investors can contribute after tax monies and invest them into stocks, bonds, mutual funds, and CDs. The child must use the funds by the age of thirty or the funds must be re-allocated to another family member or cashed out by the original recipient. These funds can also be used for elementary, secondary, or high school education expenses such as tuition, books, computers, and supplies. The Cloverdell ESA program is excellent for parents who have multiple children.

Planning for Retirement

Another important step in family financial planning is to save for retirement. Like college savings, it is never too early to start saving for retirement. One of the best retirement plans available is the 401k program offered by many employers. A 401k program allows employees to contribute pre-tax monies from their salaries into a savings and investment plan that they control. The taxes are deferred until disbursement, ideally upon retirement. If an employee leaves the company prior to retirement, the funds can be rolled into the next employer's 401k plan, cashed out, or rolled into another type of retirement plan such as a Roth IRA. Cashing out the plan has significant penalties associated with it so talk to a financial advisor prior making that choice.

A Roth IRA, or individual retirement arrangement, is another family financial planning tool for retirement savings. Under this program, the contributions are made after tax and contributions and earnings may be withdrawn tax free if the appropriate conditions are met. These usually include a specific timeframe and the age of the owner. A Roth IRA plan can be started by anyone who has an income and does not require minimum distributions like a traditional IRA. There are disadvantages to the plan as well including the income limits that are imposed upon contributors. Talk to an investment advisor to determine if this plan is the right one for you.

Life Insurance

Purchasing life insurance is another important factor in family financial planning. There are many life insurance plans to choose from but all fall in two basic categories, term life, and permanent life. Term life insurance provides coverage at a fixed premium rate for the life of the term. For instance, if you purchased a term life policy for a 10 year time frame, the policy premiums would stay at their current rates until the 10 year limit is up. At that time, the policy must be renewed at the new current market rate, or cancelled. On the other hand, a permanent life insurance policy is slightly more expensive but allows the policy owner to pay a fixed rate for their lifetime.

Family financial planning is an important consideration for anyone who has family members. Whether you are new parents or a single college student just getting started, it is never too early to begin family financial planning. Talk to an investment advisor about your short and long-term goals and develop a family program that works for your budget and your needs. You will be glad you started your plan early and gave yourself a head start on a secure financial future.

Find a Financial Advisor

Find an Advisor

Financial Advice

We can help you find a financial advisor

Our specialists will conduct a custom search to find local planners and advisors who meet your specific requirements.

"Unless you already know about working with an advisor, it can be hard to figure out which one to go with. This site helped me decide on the type of advisor that was right for me and my financial situation. Thanks!"

Randy S, Green Bay WI