Post: Financial Planning Help?

Hey there, oh knowledgeable personal finance gurus! I’m looking for some advice on where to go next financially. I’ve got my budget set out until next spring/ summer. At that point i should realistically have 4 months of “emergency funds” and will finally be maxxing out my 401k and roth ira’s for myself and my spouse. Where do i go next? I Don’t anticipate any real change in lifestyle, and no additional large expenses. I am 37. I am already making monthly payments into a 529 plan for my kid so I’m covered there. I think I’ll still have roughly 1000 a month to invest somewhere. Should i bulk up my savings? Put it into bonds? Get a vanguard account? I don’t know much about investing besides the whole 401k and roth ira situation. Enlighten me? Thanks!

My Reply:

First off congrats on reaching that milestone! As far as next steps go, there are a couple different routes you can take. You’ll have to prioritize what’s most important for you and your spouse but the information below should give you a good framework about what to think about next.


In terms of insurance, the question is should you increase your levels of coverage? Specifically your liability insurance for your car and your homeowners for your house. Some additional things you’d want to consider are if something happens to you and you’re no longer able to work will your family be ok? Do you have long-term disability coverage to prevent any undue financial stress? If you pass away prematurely do you have any life insurance to again make sure your family is provided for in your absence. If you’re underinsured in any these areas you’re essentially self-insuring depending on your emergency fund as your fall back should something happen. Are you comfortable with that?

Retirement Planning

You said you’re going to be maxing out your retirement accounts but have you done any planning to see if that amount of money is going to be saving is enough to fund the type of retirement lifestyle you want when you want to retire? What do you want to do when your retire? How much will it cost? How much will be offset by Social Security and how much won’t? Should you consider saving more in a Brokerage account or a tax-deferred annuity?

Investment Planning

As far as the specifics of how you should invest any extra savings–i.e. In bonds, cash, or stock–it really depends on when you’re planning on using the money. And with your current investments in your IRAs and 401ks you want to have a plan for reviewing the investments to make sure that as the market changes your investments are still the best for you give the current market environment. Things you’d want to consider here are how comfortable are you with making investment decisions on your own? Do you have time to do this regularly? Do you have an investment strategy based more on science that merely your emotions and gut when it comes to investing? Do you enjoy managing your investments? If you’re the main person managing the investments, will your spouse know what to do if you pass away? Based on how you answer those questions you may want to look into getting your money professionally managed.

Tax Planning

As you make more money what are you doing to minimize your taxes? If you own a business or are charitably inclined are you taking full advantage of the tax benefits?

Estate Planning

If you and/or your spouse pass away have you drawn up a will/trust to detail who will be your child’s guardian and who will inherit your assets. Do you have beneficiaries on all your accounts so those assets avoid probate?

With tackling any of these topics your best next step would be to seek out a financial planner that can help talk through your goals with yourself and your spouse and help you prioritize what would be the best area to focus on next. Hope that helps. Let me know if you have any questions.

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