In our lifetime, it is very important to note that apart from keeping our financial house in order, we must also do some financial planning so that our loved ones are cared for in the unlikely event of our death. Here are some tips for Financial planning.
Also, your family should know about the various retirement accounts and benefits that you are expected to receive and the same can be utilized by the family in case of an unfortunate event.
- Make a list of all your assets (within and outside the house) as well as liabilities and keep updating this list annually.
- Make sure you have enough insurance to cover all your future liabilities. You also need to analyze how much money you need to meet future financial goals, so that your can take insurance products accordingly.
- Do not unnecessarily keep on accumulating debt or taking loans, and ensure that at least all your high-cost debt is paid off well in time so that your family members don't have to suffer in case you are no more.
- If your investment portfolio is yielding a lower return than what you are paying on your loans on a post-tax basis, you should take expert help to evaluate rebalancing your portfolio to reduce the debt component of the portfolio.
- Build a reserve for any unexpected contingency. Best way to do is to start a separate fund for this. In this fund, you should ensure you have put aside at least 6-8 months of expenses (including all your EMI payments).
Also, your family should know about the various retirement accounts and benefits that you are expected to receive and the same can be utilized by the family in case of an unfortunate event.