You’ve worked hard to live out the American dream: a career, home ownership, investing, raising a family, saving for a child’s college education and building a nest egg over time. Taking advantage of opportunities to grow your savings, including maxing out your 401(k) at work, has resulted in a solid financial footing that allows you to have some fun along the way and even splurge once in a while. Life is good, and you’re on track to enjoy a comfortable retirement where you can continue life’s adventures. At least that’s the hope.

You should be proud of your achievements. But as we all know, life can throw its share of curveballs. So, what do you do when the threat of an economic downturn, market volatility, job loss or a health scare threatens all you’ve worked so hard to earn? In addition to making a plan for how to achieve your dreams, it’s equally important to have a strategy for how to protect them.

Rather than being concerned about the unknown, you can take proactive steps to protect your family, finances and your future dreams and goals. Consider prioritizing the following four areas to help bring peace of mind and move toward the future with confidence.

1. Plan for the Unexpected

The pandemic taught us that even the most financially astute or tenured employee might face difficulties. That’s why most financial experts recommend that you have three to six months worth of income set aside in a no-risk emergency fund like a savings account or short-term certificate of deposit to cover unexpected expenses or job loss.

It’s also important to think about how your family will be cared for in the event you’re not around. Life insurance can help protect your family from the devastating financial implications that might occur if you die prematurely. There are many life insurance options with varying benefit amounts that can be paid out almost immediately after you die, helping to provide for them after you’re gone.

You might want to look into long-term care insurance as well. More than one in five people over the age of 65 are in fair or poor health.¹ Long-term insurance may help cover the expense of a prolonged nursing home or assisted living facility stay which can cost thousands per month and potentially deplete your savings.

2. Consider Protected Income

When someone lives to the age of 65, chances are they’ll live about another 20 years, according to the CDC.¹ While you’re financially secure now, it’s important to ask whether your existing investments and savings will be enough to last that long. Social Security can provide a base income, but if your regular savings or investment returns run out down the road, Social Security won’t be enough to sustain the lifestyle you’ve become accustomed to.

If you haven’t already included annuities as a part of your diversified portfolio, they’re worth another look. Not only do they typically have lower risks than traditional investments, some income annuities allow you to build your own pension with guaranteed income for life to help ensure you never run out of money. Others allow you to still participate in the market and offer potentially higher gains and limits on losses. Annuities are typically a solid choice for conservative investors because they’re structured to have less risk than equities. Your financial professional can help you determine which type fits best in your retirement strategy.

3. Estate Planning

No one likes to talk about end-of-life decisions, but it’s an inevitability for each of us. In that unfortunate situation, your family will undoubtedly struggle emotionally, so minimizing any financial concerns or confusion may help them cope. For starters, it’s imperative that you have a will. Consider working with an attorney to draw up a will and establish a financial power of attorney (POA) and a healthcare POA to help ensure your wishes are carried out. Larger estates may also benefit from establishing a trust. As stated earlier, consider life insurance as a way to improve your family’s financial wellbeing after you’re gone.

4. Talk with a Financial Professional

The financial professionals located at your local credit union care about your future and are there to help you plan for the known and the unknown. Your financial security is their top priority, and they offer a wide range of financial tools, products and sound advice to help protect your future.

Get started today. Contact the financial professionals at Frontwave Investment Services, located right here at your local credit union.

SOURCE: 1. Centers for Disease Control and Prevention, Older Persons' Health, March 26, 2021

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