How to Approach Life Planning Even If You are Clueless

I had the pleasure of making acquaintances with Jackie Waters with and she wrote this great article for this website.  I hope you find as much value in this life planning post as I do.  -Jason

How to Approach Life Planning Even If You are Clueless


Financial advisors are beginning to take a new approach to helping people plan for retirement. Rather than narrowing the scope of the plan to a retirement date, they are guiding people through the process of planning for life – not only their own but also their children’s. If you are a new parent or a parent who is coming to the realization that you need to be better prepared for the rest of your life and your children’s, you need to know how to approach life planning… even if you are clueless about it.

Understand That Your Role as Parent Means Providing for Your Children

Unfortunately, many parents are better at planning their children’s weekly schedule than they are at planning their own lives. As soon as you have a child, planning for his future becomes your responsibility. You may not want to think about writing a will, getting a life insurance policy, and getting your paperwork together to transfer your estate to your child (or think about what happens to your mortgage after you die, for that matter), but all of these tasks fall on your shoulders as soon as your child enters the world. Even if you have not begun the life planning process, there is time to do so, regardless of the age of your children.

Secure Good Insurance Policies

Insurance policies can be difficult to understand and choose on your own, but, if you undergo the life planning process with a financial advisor, you will lay out your most important priorities and then take steps to make the priorities become a reality. Many parents do not want to be a financial burden to their children, and the solution is to secure good insurance policies. Allow your financial advisor or insurance agent to explicitly explain the various policies that are available to you before making a decision, even if you don’t want to think about your death.

Some families opt for family life insurance. These policies secure the financial future of your family when you are no longer there for them. Rather than signing up for and managing multiple policies, you can opt for life coverage for your immediate family with one rate under a single policy. Other families opt for life insurance for children to help cover their end-of-life expenses in the event of a tragedy. The younger your children are when you get them covered, the better the position they will be in when it comes time to secure coverage as adults. Many children’s life insurance policies also convert as they become adults.

Of course, the insurance coverage you choose needs to fit your family’s budget and current and future needs. Some financial advisors also sell insurance; if you trust your financial advisor, discuss your insurance options with her and determine which policies will help you meet the priorities you laid out in your life plan.

Write Your Last Will and Testament

Nobody enjoys writing his will, but it is a necessary part of the process of securing your children’s future and creating your life plan. If you have young children, you should designate a guardian for them until they turn 18. You also should identify financial guardians to take charge of your financial assets and to ensure they are used to provide care for your children until the age you specify in your will.

Set Up Retirement and College Savings Accounts

Most people make retirement and college savings two of their priorities in their life plans. You will want to maintain your quality of life throughout your retirement years, and you’ll most likely want to help your children get a college education without drowning in debt from school loans for decades after their graduation. That’s why setting up retirement and college savings accounts is such a popular task for parents today.

Even if your retirement and your children’s college years are far off in the distance, you should take steps with your financial advisor to create separate retirement accounts and college savings accounts.

You may have a pension, a Roth IRA, a traditional IRA, and/or a 401k for your retirement dollars. Your financial advisor will walk you through the various options and guide you toward the ones that are best for your circumstances and your life plan priorities. Be sure to understand the taxes each plan is subject to and what your responsibilities are for each account type.

College savings plan options include 529 savings accounts, UGMA/UTMA accounts, general investment accounts, and education savings accounts (ESAs). You should know the pros and cons of each option and carefully weigh your options before making a decision.

Being a novice makes life planning more of a challenge, but it is not an excuse to ignore the life planning process and fail to provide for your children’s futures when you are gone. Take advantage of the services and advice provided by financial planners, lawyers, and accountants, and you will create a solid life plan even if you are a novice.

Image via Pixabay by PublicDomainPictures

Leave a Reply