You understand the value of setting financial goals. Goals serve as stepping stones to achieving your dreams. Saving for retirement is a top priority for many people since some analysts suggest you may need as much as $1 million to retire comfortably.[i]

But what about those intermediate goals, the ones you set along the way to retirement? Are you setting aside adequate money to build those funds?

Here are some intermediate goals you should keep in sight as you make your way to retirement:[ii]

Build an emergency fund.[iii] Experts say you should accumulate three months of living expenses. If you have $4,000 in monthly expenses, for example, you should shoot for $12,000. Six months is even better. That would come to $24,000 in your emergency fund. The ideal goal is to have 12 months covered. That’s $48,000.

Eliminate debt.[iv] This is a lofty and worthy goal, especially since most Americans are living beyond their means. The average American household debt is $137,063, while the median household income is $59,039. Analysts warn that debt, especially with credit cards, is a disaster waiting to happen. “We simply can’t keep taking on credit card debt forever without it causing major problems,” said Matt Schulz, CreditCards.com’s senior industry analyst. “This record [debt] probably won’t be a major tipping point, but it likely isn’t too far off.”[v]

Plan to retire early. That may seem similar to the goal of implementing a responsible retirement strategy. But this one instills the importance of retirement saving into your financial planning. Unanticipated circumstances may derail an otherwise well-designed retirement strategy. Financial setbacks, ill health, or family challenges may require you to put on hold budget priorities. The adage applies. It’s better to plan early and be overprepared than to let life catch you by surprise.

Examine your insurance needs. Life happens. And insuring yourself against worst-case scenarios is very important. Here are five policies you should consider having:[vi]

1. Long-term disability insurance allows you to maintain your current lifestyle if you become disabled.
2. Life insurance ensures your family’s financial needs are met if you or your spouse dies. A good way to estimate your coverage levels is to determine how long you’ll work and how much you’ll make per year. Add burial costs into your calculations.
3. Health insurance is a must as medical costs continue to rise. Hospital visits, surgeries, and other treatments can rise quickly into the 5-digit cost range.
4. Homeowner’s insurance will help you replace your house and its contents after a disaster. Check with local builders to get estimates on square footage construction costs.
5. Automobile insurance is required in many states. Crashes can happen quickly and unexpectedly. Costs in damage and liability can be considerable.

If you would like to discuss your current financial needs or review your current policies, we’re happy to talk.

[i] https://www.cnbc.com/2018/04/11/how-to-figure-out-how-much-money-you-need-to-retire.html

[ii] https://www.goodfinancialcents.com/good-financial-goals/

[iii] https://www.thebalance.com/how-much-should-i-have-in-my-emergency-fund-2388353

[iv] https://www.usatoday.com/story/money/personalfinance/2017/11/18/a-foolish-take-heres-how-much-debt-the-average-us-household-owes/107651700/

[v] https://www.washingtonpost.com/business/us-consumer-debt-is-at-a-record-high-havent-we-learned/2017/08/11/5c7bee6e-7e13-11e7-a669-b400c5c7e1cc_story.html?utm_term=.e0f142779450

[vi] https://www.investopedia.com/insurance/insurance-policies-everyone-should-have/