Your 20s and 30s may be a time for personal development, career exploration, and settling down and starting a family, but it’s also important to start planning for the future — especially your retirement and estate. The earlier you start planning for the future, the more financial security you and your loved ones will experience later in life. To explore three of the steps you should take in early adulthood to start planning your retirement and estate, Skyline Insurance Agency invites you to read on!

Start Saving for Retirement

If you’re working and earning money in your 20s and 30s, you should be contributing to an individual or employer-sponsored retirement plan — even if you’re only setting aside $10 to $20 each month. Most experts recommend saving at least 10 percent of your monthly income for retirement, but any amount is better than nothing at all. The earlier you can start saving for retirement, the less catching up you’ll have to do later in your working career.

As you start planning for the future, it’s important to compare the different types of retirement plans to find the best option for your employment situation and financial goals. While several popular retirement plans include 401(k)s, individual retirement accounts (IRAs), and Roth IRAs, note that 401(k) plans are sponsored by employers and IRAs are only available to those who receive earned income. However, a financial advisor can help you to choose the right account for you and your retirement goals.

Create Your First Will

While a will may seem unnecessary when you’re young and healthy, there are plenty of reasons to draft a will in your 20s or 30s — especially if you’re married, own a home, are entering the military, or have dependents. By drafting a will in early adulthood, you can leave your surviving family members with the following types of information in the event of your premature death:

• The name of a guardian for your pet(s), if you have one or more animal companions at home
• Instructions on managing your social media accounts, such as whether you’d like them deleted or memorialized
• The named beneficiaries of your possessions and assets

When drafting your will, you might also choose to designate a healthcare power of attorney (POA) to make medical decisions on your behalf if you become physically and/or mentally incapacitated. However, you should trust the person you name as your healthcare POA and be comfortable in his or her ability to stand up for your rights.

Get Life Insurance

Even if you have an employer-sponsored life insurance policy, it’s incredibly important to have an individual policy, especially if you have children and a mortgage. When determining your coverage, take stock of your assets and liabilities. If you want your life insurance to help your partner pay off your home, get a ballpark estimate of its value through an appraisal calculator. If you have car, boat, or even student loans, you’ll also want to take these into account. The ideal amount of coverage should be around 5 to 10 times your annual salary, but it all comes down to what works best for your situation.

Purchase Burial Insurance

In addition to having life insurance coverage, it’s worth exploring the benefits of purchasing a burial insurance policy in your 20s or 30s — as this type of plan would cover your funeral expenses in the event of your death. Some final expense insurance policies will even cover your outstanding loans and medical bills when you die, in addition to paying for your funeral, memorial service, casket, urn, and other types of final expenses.

Before purchasing burial insurance, it’s important to think about the specific types of final arrangements you’d like — such as cremation or burial and traditional funeral service or life celebration. Then, think about how much coverage you’ll need when you die, and whether you’d like the policy to cover your outstanding bills and debts as well.

A Final Word

Estate and retirement planning aren’t the most enjoyable of activities when you’re young, healthy, and just starting out in your career, but they’re essential steps that everyone should be taking in their 20s and 30s. By taking these steps early on, you’ll set yourself up for financial success later in life — and you’ll have the peace of mind that your loved ones will be cared for in the event that you die prematurely.

Guest post by Christopher Haymond

Photo by Andrea Piacquadio

Health insurance should always be a component of your financial plan. If you are looking for a new plan that fits your or your family’s needs, connect with Skyline Insurance Agency today!

Article Source: https://skylineinsuranceagency.com/retirement-and-estate-planning-in-your-20s-and-30s-3-crucial-steps-to-take/