Life Insurance and Financial Planning (continues)
Higher Standard of Living
A higher standard of living means that real income increases over time. Real income 
(money income adjusted for inflation) refers to the goods and services that can be purchased with money income. An effective saving and investing program can increase future real income and standard of living.
Protection of the Family and Property
An extremely important financial goal is protection of the family and its property againstloss exposures that create financial insecurity.
Saving for Retirement
Saving for retirement is another important financial goal for most Americans. Social Security retirement benefits provide only a minimum base income. Additional retirement income can be attained by establishing retirement plan.
Purchase of a Home
Purchase of a home is a high priority financial goal for many people, however, the down payment and closing costs may require thousands of dollars. The amount needed can be accumulated through an effective saving and investing program. Request a FREE Life Insurance Quote
College Education for Children
For many families, the college education of their children is an important financial goal, requiring financial planning, regular saving, and effective investing.
Emergency Fund
Financial planners typically recommend a savings fund, equal to three to six months of take-home pay, for unexpected emergencies. An emergency fund is especially important with respect to the unemployment loss exposure. Other emergencies could involve health care expenses or disability, as well as the breakdown, theft, or destruction of the client's property
Getting Out of Debt
Getting out of debt is an important financial goal for many Americans, who are deeply in debt because of overspending, abusing credit cards, and taking out high-interest consumer loans. Consumer loans typically include car loans, appliance and furniture loans, personal loans, education loans, consolidation loans, and similar types of consumer installment loans. According to VISA, the average American has 8 credit cards in their wallet.
Minimizing Taxes
An important financial goal is to minimize the taxes that consumers pay. Average income earners can easily pay 40 percent or more of their total annual income in taxes of all types. These taxes include federal and state income tax, sales tax, property tax, gasoline tax, telephone tax, and numerous other taxes. In addition, taxation does not end at death. In many cases, particularly if the estate is large, state and federal estate taxes apply to the deceased person's estate.
Summary
Advantages of Financial Planning
Developing a financial plan offers numerous advantages to individuals and families. Personal wealth can be increased; an improved standard of living is more easily attained; financial goals can be achieved; the family can be protected against major property, liability, and personal loss exposures; credit problems can be avoided or reduced; and taxes can be minimized.
Obstacles to Financial Planning
Despite the above advantages, many Americans do not have an effective financial plan because of certain obstacles. These obstacles include the unwillingness of many consumers to save and invest; the excessive use of high-interest credit cards and continued overspending; the natural tendency to procrastinate and delay saving for specific goals, such as retirement and the children's college education; and inadequate knowledge about financial planning.
Agents and brokers can have a positive impact on the lives of many Americans and their families by helping them with their life insurance needs. Request a FREE Life Insurance Quote
