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How to Plan for Your Financial Future

Planning for your financial future doesn't have to be intimidating. Here are some simple steps to build lifelong income.


  • Step 1: Have a plan Have a plan. It's never too early -- or too late -- to create a road map for your financial future. Whether you want to save for your first home, your child's college education, or retirement, when you have a plan in place, you're better positioned to weather the ups and downs of the market and make more informed decisions.
  • TIP: Seek advice from a retirement-planning specialist who is objective. You want to be sure that any recommendations are based on your best interests, not theirs.
  • Step 2: Diversify your portfolio Spread your money among different types of investments, like stocks, bonds, real estate, and money market accounts. Different types of investments tend to rise and fall at different times; so if one area loses value, your entire portfolio won't suffer.
  • Step 3: Arrange for guaranteed income One goal of saving for retirement is to replace the income you earned when you were working. Consider buying a low-cost annuity: a lifetime annuity can provide guaranteed monthly income for the rest of your life -- no matter how long you live.
  • TIP: If your employer offers a low-cost annuity in your retirement plan, consider investing in it now.
  • Step 4: Get the most value Get the most value out of your plan. Look for low-fee investments; even small charges add up and can dent your money's ability to grow. And take advantage of any free financial services offered by your current employer, like financial education seminars or consultants that can help you review and plan for your financial goals.
  • Step 5: Make your money work harder for you Maximize your savings by taking advantage of any workplace perks, like a 401(k) that offers matching contributions from your employer, or programs that give you tax breaks for putting away money for things like education and retirement health care.
  • TIP: If your employer offers matching contributions, try to save at least enough to be eligible for the match. It's a risk-free way to double your contributions.
  • Step 6: Start saving now Don't worry if you can't put all of these strategies to use right now; the most important thing is to save. The earlier you start, the more time you have for your money to work for you.
  • FACT: A 30-year old saving approximately $250 a month can build a $350,000 nest egg by age 65. It takes a 50-year old saving more than $1,200 per month to achieve the same goal.

You Will Need

  • Plan
  • Objective advice
  • Diversified portfolio
  • Income you can't outlive
  • Low-fee investments

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