A comprehensive financial plan should be reassessed periodically to incorporate life changes.

A comprehensive financial plan should be reassessed periodically to incorporate life changes.

Have you had your annual financial check-up?

If financial freedom is a life goal for you, a financial plan is critical. A comprehensive financial plan should be reassessed periodically to incorporate life changes. You can begin at any stage in life with just a few small goals and build from there. Then, review and adjust your financial plan each year to optimize your performance.

Whether you are just getting started or want to make sure you are maximizing your savings, consulting a knowledgeable advisor can save you time and help you set achievable goals. This overview can help you determine what financial stage you are in and provide key tips to start building a solid foundation for your financial future.

Stage 1: Early Career

As you begin your career, you may have already taken on student loan debt. A financial advisor can help you strategize ways to minimize that debt and make smart investments. It’s important during these years to establish good credit to be able to take advantage of better loan rates and increase your purchasing power down the road.

While it can be hard to take any money out of those early paychecks, establishing a 401K earlier in your career can pay off when you retire.

“With your first job, it’s important to set up a Roth IRA or 401K retirement plan,” explained Earl Johnson, an investment sales manager at First Federal Investment Services. “Even $20 a paycheck can make a difference when you let decades of interest compound. And with a Roth IRA when you take out that income after the age of 59 and a half, and have had the account open at least five years, it’s tax free.”

Also, if you work for a company with a 401K matching program, find out the maximum amount your company will match and set that as a minimum goal for your contributions to maximize your 401K contributions.

Key Takeaways:

  • Build and monitor your credit score
  • Take advantage of 401ks and company matching opportunities as early as possible
  • Organize your money with multiple bank accounts
  • Budget and track your finances with tools like Money Management

Earl Johnson, Investment Sales Manager at First Federal Investment Services

Earl Johnson, Investment Sales Manager at First Federal Investment Services

Stage 2: Growing Wealth

In this stage, you may have had several different jobs, started a family, or bought your first home. Any of these life decisions will have a major impact on your financial landscape. Regular checkups with an advisor can help you adapt your financial goals to complement your life goals. They can also help you understand how to assess and optimize your current portfolio of assets.

“When you change jobs more frequently it’s especially beneficial to have a long-term relationship with a financial advisor to help adapt your plan as you experience life changes,” noted Johnson. “That stability can make life transitions easier and give you an advocate in times of financial upheaval.”

As soon as you have children, preliminary estate planning becomes an essential part of a dynamic financial plan. An advisor can help you look ahead to create new financial goals for both you and your children, as well as weigh life insurance and inheritance plans. It is also a good time to start an emergency, or “rainy-day” fund for any unexpected expenses. During this stage of major life changes it’s essential to perform annual check-ups to keep your financial plan optimized.

Key Takeaways:

  • Diversify your portfolio of assets
  • Start a rainy-day fund
  • Review and adapt your financial plan after any major life changes
  • Evaluate life insurance options
  • Start an estate plan

Stage 3: Managing and Preserving Wealth

In this stage you want to protect the wealth you have accumulated, while continuing to optimize growth and manage expenses. You could also be facing a new round of college tuition expenses for your children, or mortgage payments on a new home or investment property.

Understanding your net worth, or assets vs liabilities, is key to making informed planning decisions. This stage is a crucial time to evaluate how close you are to the amount you need to retire and optimize your investments to help pursue that goal.

Many people who have changed jobs multiple times in their careers risk losing track of past 401K savings if they haven’t contacted their previous employers to roll them over to their current plan or a retirement account. A financial planner can help with that process to make sure you don’t lose out on those investments.

Key Takeaways:

  • Understand your net worth
  • Convert 401ks from previous jobs
  • Perform financial check-ups to optimize investments
  • Calculate how close you are to your target amount for retirement

Stage 4: Distribution of Wealth

In this stage it’s important to make sure you have adequately budgeted out your retirement years and have a plan to address any lingering debt or expenses. If investment returns are a large part of your retirement income, you should evaluate your risk tolerance vs your investment goals. The tax rate on those returns is another important calculation in correctly budgeting investment income.

This stage is also the time to fine tune your estate plan to make sure your wealth will be distributed in the manner of your choosing.

“A detailed estate plan can save your family stress and uncertainty down the road,” Johnson added. “It’s also important different types of wealth distribution, such as gifting money to your heirs each year rather than one lump sum down the road. A tax professional can help you determine a sound gifting strategy.”

Key Takeaways:

  • Budget out your retirement years
  • Fine tune your estate plan
  • Consider tax implications on investment returns and estate distribution

Michael Ivers, Financial Advisor with First Federal Investment Services (right)

Michael Ivers, Financial Advisor with First Federal Investment Services (right)

Your Future Starts Now

Retirement age can sneak up quickly, so it’s important to plan ahead. A sound financial foundation will help you retire when you want and have the resources to enjoy that new life stage. Building an ongoing relationship with an experienced advisor can alleviate stress during financial transitions and save time when adjusting your investments to life changes. However you decide to develop your financial plan, the time to get started is now!

To connect with a financial advisor at First Federal Investment Services visit www.ourfirstfed.com/investment-services

In consideration of how we voice our opinions in the modern world, we’ve closed comments on our websites. We value the opinions of our readers and we encourage you to keep the conversation going.

Please feel free to share your story tips by emailing editor@bellevuereporter.com.

To share your opinion for publication, submit a letter through our website https://www.bellevuereporter.com/submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) We reserve the right to edit letters, but if you keep yours to 300 words or less, we won’t ask you to shorten it.

The news and editorial staff of Sound Publishing, Inc. had no role in the preparation of this post. The views and opinions expressed in this sponsored post are those of the advertiser and do not reflect those of Sound Publishing, Inc.

Sound Publishing, Inc. does not accept liability for any loss or damages caused by the use of any products, nor do we endorse any products posted in our Marketplace.

More in Local Marketplace

One of Robin Callahan's clients brought in some beautiful pieces of old and broken jewelry. The client gave Callahan complete design freedom, and she created this amazing statement pendant.
Bainbridge Island jeweller adapts heirlooms to create modern masterpieces

Something old, something new: Giving new life to outdated jewelry, while preserving the memories

Comcast RISE is accepting applications through June 17, 2022 for Marketing & Technology Services awards through the Comcast RISE Investment Fund.
Local Small Businesses Finding Support Through Special Grant Program

By Ximena Juarez, Owner Master Esthetician, Dalior Salon & Esthetics Like many… Continue reading

A comprehensive financial plan should be reassessed periodically to incorporate life changes.
Have you had your annual financial check-up?

If financial freedom is a life goal for you, a financial plan… Continue reading

Connecting more people to the Internet and the technology they need to participate and excel in an increasingly digital world has been a core focus for Comcast.
Helping Bellevue Residents Connect to the Transformative

Power of the Internet Both at Home and On-the-Go

Through volunteerism and and financial support, 1st Security Bank’s Overlake branch regularly gives back to its community, including donating more than $200,000 to food banks in their branch footprint last year, including Redmond’s Renewal Food Bank.
Community banks, community support

Alison Hero thought she was ready for the pandemic. She prepared an… Continue reading

Sail Like a Girl team with First Fed's Luxmi Love (Port Townsend Branch Manager) and Steve Oliver (Board Chair) before the NWMC WA 360 race in 2021. (Photo credit: Jen Swanson)
First Fed Gives $1M to Northwest Maritime Center to Expand Access

Located on the peninsula, the Northwest Maritime Center (NWMC) is dedicated to… Continue reading

First Fed and FNWB CEO Matt Deines and First Fed COO Chris Riffle.
Financial fintech partnership expands loan opportunities

Companies often seek out banks to help expand their product offerings in… Continue reading

Island Herb offers a welcoming setting, staffed with knowledgeable, experienced budtenders who are committed to helping both medical and recreational cannabis users find the right product for their unique needs.
Cannabis questions? Medical or recreational, this Island team is here to help

While Island Herb has its roots as a licensed medical marijuana dispensary,… Continue reading

The M.V. Coho has carried millions of cars and passenger in its 60 years of service.
Black Ball Ferry sails again

The Black Ball Ferry Line is sailing again after 18-months of suspended… Continue reading

Comcast will award $1 million in total grants as well as technology and marketing resources to more than 100 small businesses owned by people of color in King and Pierce Counties (Comcast Washington)
Four Bellevue Businesses Awarded $10k Grants Thru Comcast RISE

Locals are among 100 small businesses awarded

Carly Willis of Antique Marketplace
Blast from the past: Auburn antique mall unites classic style under one roof

Sometimes what you’re looking for just can’t be found on the store… Continue reading

Grand prize winner Jaidyn Backus was drawn to take the photo when she saw the rock stack at Salt Creek. “I loved seeing how they made the rocks balance so flawlessly.”
Local Talent Featured in Proudly PNW Calendar from First Fed

Each year, First Fed holds a photo contest to select stunning images… Continue reading