We often make decisions based on expectations about the future, but the future is never as expected. It can be better or worse, but almost never as we expect it. A sound financial plan addresses such unexpected events, particularly when they can be a serious setback to achieving our goals. Planning for setbacks is part of what financial planners call risk management, and liability insurance is part of it.
Continue reading
Most investors are so focused on their stock portfolios that bonds are often just an afterthought. For many of them, a bond portfolio means stable value or money market funds. However, the role of bonds is just as important as the role of stocks for a successful investment experience, and even more important for some goals. The right bonds help you avoid unnecessary risks and make the most out of your portfolio, particularly in a low interest rate environment. A good bond portfolio acts like a reliable brake system on a racecar: good brakes won’t make the car go faster, but it will make it go faster around the track. If you are not the race type, you know that good breaks help you arrive safely at your destination. That’s the role of bonds, and more.
Continue reading
Many people think their health care in retirement will be free or close to it because of Medicare. Here is some bad news for you: Medicare is subsidized, but not free. According to estimates by Fidelity, a single retiree can be expected to pay between $140,000 (men) and $150,000 (women) in health-care related expenses throughout their retirement, starting at age 65. For a couple, the expense is twice as much, close to $300,000. The sooner you learn the basics about Medicare and its likely costs, the more you’ll be able to plan and cover these costs.
Continue reading
Protecting your ability to generate income with disability insurance is a key aspect of a sound financial plan for most people. However, it is one often neglected, with the belief that we are covered through work or that disability is a very rare occurrence. Given the stakes, however, it’s best to carefully evaluate both assumptions.
Continue reading