Financial Protection: Safeguarding Your Future

Financial Protection: Safeguarding Your Future

As we get older, it’s natural to want to protect ourselves and our loved ones from the financial risks that come with aging. But how do you know when it’s time to start thinking about your future?

The answer lies in understanding what type of risk you are actually exposed to and how much protection you need. Here are some key questions to ask yourself when determining the appropriate level of financial protection for you and your family:

What is my current net worth?

Do I have a sufficient emergency fund?

Can I afford to lose my job or suffer an unexpected illness?

Financial protection is about more than just the money you have in the bank. It’s about protecting the future for you and your family.

Financial protection is about more than just the money you have in the bank. It’s about protecting the future for you and your family.

That means taking steps to ensure that if something happens to you, there’s someone who can take care of your loved ones — and vice versa.

Here are some important things to consider:

Life insurance: You may want to consider buying life insurance if you’re single or married without children; it protects your family if something happens to you. Life insurance can also be used to pay off debts if necessary, especially if there are no other assets available to cover them.

Disability insurance: If you’re self-employed or work for an employer who doesn’t offer disability benefits, disability insurance protects your income if an illness or injury prevents you from working for a period of time. The policy pays out monthly benefits until you’re able to return to work — which could be several months or years away. Some policies even cover partial disability and rehabilitation costs, so check with your broker before purchasing any policy.

When it comes to safeguarding your future, the best place to start is with an emergency fund. Experts agree that you should have enough money set aside to cover three to six months’ worth of expenses. That way, if something unexpected comes up — say you lose your job or have an expensive medical emergency — you’ll have the cash on hand to cover the costs without having to tap into other savings or loans. That means tracking your spending, so you know where every dollar goes and can make adjustments accordingly.

You also need to take steps now so that when retirement rolls around, you’re not scrambling for Social Security benefits or trying to figure out how you’ll cover your medical bills in old age. Here’s how:

You may be surprised to learn that the average American household has only $1,000 in savings. If you’re like most people, this isn’t enough to cover an unexpected expense, much less a retirement nest egg.

Thankfully, there are some simple steps you can take now to protect yourself from financial disaster in the future. What follows are five of the most important steps you can take to safeguard your financial future:

Save money regularly

Make sure you’re saving enough money to meet your long-term goals or emergencies. If you’re saving for retirement, make sure that you have enough in your 401(k) plan (or other retirement savings vehicle) so that it will last through your entire working life and beyond. If you’re saving for an emergency fund, make sure you have enough money set aside so that if something happens (like losing your job), it won’t derail your plans or put undue stress on your family’s finances.

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