For most people, the golden years of retirement seem to be a distant dream. But for many, these goals are actually attainable with proper planning. The financial decisions that older Americans make can be some of the most critical in their entire lives, so it’s important that they’re well-informed and knowledgeable about what they’re investing in. Here are some benefits of wealth financial planning.
i. Help you achieve financial security
Younger generations have no problem achieving the American dream, even if they don’t earn a lot of money; they’re able to live out their lives without worrying about money. However, this is not the case with older generations. While a retired couple may not be required to live in a sparsely furnished house, they traditionally are required to devote a portion of their monthly income to bills and expenses. A majority of older Americans still need to live comfortably, but once they retire, the average American set aside less than six percent of their annual income for the future when they were working full-time.
ii. Peace of mind
Having financial security is very important to a majority of older Americans; they are concerned with how their decisions will affect their future. Disregarding their future is what leads many older Americans to live paycheck-to-paycheck, which leads to unnecessary stress and anxiety. It’s important for them to know that the money they spend now can be invested for retirement so that when they no longer have a job, they don’t have to worry about how much money they’ll have once they’ve retired.
iii. Stable income
There are certain things that change in life, and a stable financial plan is not one of them. As many older Americans are bringing in less income, they need to be able to count on a guaranteed source of income. Not having an investment plan that can offer a consistent stream of income is one of the main reasons why so many older Americans fall into poverty when they retire. Financial planning preserves their money so that they can have additional resources if they find themselves in particular financial situations as they grow older.
iv. Tax benefits
Older Americans need to be aware of the tax benefits they qualify for. Those who have 401(k)s and IRAs, they can receive a tax break if they put some of their money into them. They also receive benefits based on their income brackets, but that usually means taking less money out of their paychecks in taxes each month.
iv. Desired retirement lifestyle
A majority of older Americans don’t plan out their retirement lifestyles until after they actually retire. They may not even know what financial goals will help them achieve the lifestyles they desire as retirees until then. This is why it’s important to consider what type of investment plan will help them achieve the lifestyles that best suit their needs during retirement.
There are several tangible benefits of wealth financial planning. While the benefits may not be immediate, they will eventually come to fruition. A well-planned investment plan that helps older Americans achieve their financial goals and lead happy, independent lives can often be worth tens of thousands of dollars over their lifetime.