Long-Term Planning for Young Professionals in 4 Easy Steps

Retirement and estate planning should begin the moment you get your first job, but many adults in their 20s and 30s don’t have plans established for when they leave the workforce or pass on. If you are one of them, don’t put it off any longer. Take the time today to set up your retirement and estate plans using these helpful tips from JPink Law.
  1. Take Stock of What You Have
Although your assets will change over the years, hopefully growing into a sizeable amount, it’s important when you do your planning to have an accurate idea of what assets you already have to your name. If you own a home, for instance, you have equity from that home. The amount of equity you have can be determined by subtracting how much of your mortgage you still owe from your home’s current market value. For example, if you borrowed $200,000 for your mortgage and have paid $40,000, but your home’s value has increased to $220,000, you would now have $60,000 in equity in your home.
  1. Calculate What You’ll Need in Retirement
The amount of money you need in retirement is different for everyone and depends on a few factors. How early you plan to retire and how much you will need to stay comfortable in your life are two of the primary ones. According to the experts at The Balance, a good rule of thumb is to multiply what you currently spend each year by 25. The number you get is what you’ll need to have in your investment portfolio to be able to withdraw 4% a year to maintain your current lifestyle.
  1. Invest Wisely
Most workplaces have retirement benefits, with some companies offering to match retirement contributions up to a certain percentage or amount. Take advantage of this when offered, as it is essentially free money in your retirement fund. If you aren’t familiar with investing, consider hiring a professional to help you manage your investments. While investing something is better than nothing, the right guidance can make the difference between you retiring early with a comfortable amount to live off of and you working for longer for a meager yearly allotment.
  1. Write Your Will or Trust
Many younger people don’t realize that they can set-up a will or Trust, depending on their situation. When most people talk about a will, they are typically referring to the last will and testament. This document declares how people want their assets and other belongings divided up among those individuals or institutions they intend to give them to after they have passed on. The Will also names guardians for minor children. Unfortunately, a Will does not avoid probate and if that is important for you then a Trust may be necessary! Don’t let more time pass when you could be investing intelligently in your retirement and establishing plans for the long-term. You’ll sleep better knowing you’ve done all that you could to protect your assets and the ones you love by planning for your future today. Schedule a free consultation with JPink Law to start. This post was guest written by Ed Carter with www.AbleFutures.org

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