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Financial Planning Is Something That They Do Essay
Pages:3 (836 words)
Sources:3
Subject:Personal Issues
Topic:Financial Planning
Document Type:Essay
Document:#27096655
financial planning is something that they do not take seriously until later on life. Evidence of this can be seen with a survey conducted by Lawyers.com. They found that only 35% of Americans have a will and 21% have a trust established. This is problematic, as the lack of planning can hurt the trustee's ability to reduce taxes and other liabilities for beneficiaries. (Sarji, 2011)
To avoid these challenges, requires establishing a financial plan which is taking into account a number of scenarios. This will be accomplished by looking at: the current / future income needs, debt acquisition / retirement preparation, the purchasing / disposal of personal assets, emergency funds and investment / retirement / estate planning. Together, these different elements will show how to create a financial strategy that is prepared for a host of events. (Sarji, 2011)
Current and future needs
Any kind of planning should take into account current and future needs. This is because there will be inevitable changes to individual lifestyle choices over the course of many years. As this is taking place, there will be greater demands for access to specific services and products. This will provide the individual with the resources they need to feel happy and comfortable. The way that this should be achieved is to offer continuous cost of living increases. This can start at predetermined points in the future and it could be used to help enhance the needs of the individual. (Harrington, 2007)
Debt acquisition and retirement
The acquisition of debt is when there will be an emphasis on reducing all long-term liabilities and controlling expenses. This will be achieved by establishing a strategy where any loans, bills and other liabilities is directly paid. Over the course time, this decreases the outstanding debt and it enhances the free cash flow that is being generated. (Harrington, 2007)
At the same time, the individual needs to build their retirement account over the long-term. This will be achieved through establishing different areas that will accumulate funds to include: 401ks, IRAs and Keoghs. These areas will provide a way of reducing taxes and protecting against probate. This will offer contingency allowances by continuously building this aspect of the estate. When this happens, there will be greater amounts of stability and growth. (Harrington, 2007)
Acquisition and disposal of personal assets
The personal assets will be acquired and disposed of using a family trust. This is when there is a formal trust established to protect the net worth of the family…
Sample Source(s) Used
References
Family Trusts Explained. (2012). Clear Docs. Retrieved from: http://www.cleardocs.com/extra-family-trust.html
Harrington, J. (2007). Everything Retirement Planning Book. Avon, MA: Adams Media.
Sarji, H. (2011). Declining Health is Scary. Forbes. Retrieved from: http://www.forbes.com/sites/hanisarji/2011/10/17/declining-health-is-scary-estate-and-financial-planning-can-protect-you/
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