It’s never too late to start planning for a brighter financial future. Whether your retirement is a few decades away or a few years away, there are positive steps you can take now to get where you want to go later. Ideally, the right planning and timely moves can lead you down the path to financial independence.
Financial independence may have different meanings to different people. In general, it refers to a financial state of being where you aren’t dependent on a job to support your lifestyle. You have enough saved up for a comfortable retirement and/or a steady stream of income through your investments. This level of financial freedom is the ultimate goal for most Americans, and it can be achieved through sound financial planning.
Obviously, the earlier you start planning and preparing for the future, the better off you will be as you approach retirement. Something as simple as putting tax-deferred income in a 401(k) plan at an early age can make a significant difference in your long-term financial health. You may be able to implement a relatively conservative plan that sets you up for retirement. The older you get, the more aggressive you may need to be with your planning and investment strategies. You might not be able to make up for all that lost time, but you can accomplish quite a lot with smart investing. Goals like paying off debts and building up savings will also contribute to a more comfortable financial future.
The journey to financial independence starts with setting your goals. You may have short-term goals (buy a house, live in a nice neighborhood, etc.) and long-term plans (save for retirement, pay for your children’s college expenses, etc.). Knowing what you want to achieve and when you want to achieve it will help you put together a better financial plan. Also understand that plans can change along with your life. Your priorities will change when you get married and start a family. Different jobs or entrepreneurial opportunities may arise and send your journey down different paths. Market conditions and tax codes may change, which could dramatically affect one or more of your key investments. Be prepared to adjust your goals and adapt your plan as life goes on.
Once your goals are defined, you can start putting a plan together to achieve those specific objectives. Identify strategies and investment opportunities that can keep you moving in the right direction. And like we said, be prepared for changes and have a plan that is flexible enough to keep you headed on the road toward financial independence.
This is not a journey you have to take by yourself. In fact, having trusted guides and advisors will help you build a more successful financial plan. Work with a financial planner or wealth management advisor. You may also consult with tax planners and attorneys on different aspects of your financial plan, tax strategies and estate plan. Trusted advisors can provide useful knowledge and objective advice along the way.
For help with all your financial planning need as you start (or continue) your journey toward financial independence, contact Illumination Wealth.