One never knows what the future has in store for them. While one can find oneself prepared, one must expect the unexpected in order to truly be prepared for the future. These are a few methods you have to protect yourself from unseen problems whenever they happen to arise.
Lifelong Life Insurance
Life insurance is commonly thought of as an end of life preparation only, and this simply isn’t the case. The nature of life is that it is fragile and fleeting, and death could come at any time. While the odds are on your side, there’s just no telling what might happen. Squaring away your life insurance early is all but essential. However, a term life plan only covers you for a finite length of time, usually no more than 30 years. This type of insurance is common among the elderly or those in a dangerous occupation, for obvious reasons, but there is a long term alternative in the form of a participating whole life insurance plan, also known as an IRC 7702 plan. A whole life policy is just what it sounds like, a life insurance plan that covers your whole lifespan with monthly payments. While more costly, it gains value over time, as well, and it can be used for emergency funds throughout your life, if need be.
Robust Savings
A savings account is an easily accessible extension of any bank account, but it often goes neglected by young people. While feeling like long term issues are a world away makes a sort of sense for younger people, preparing for the future is always more effective when done early on. A savings account is no different, because it increases in value as you deposit money into the account, but also increases by way of monthly interest that is calculated as a percentage of your account balance. The more you have in the bank, the more interest you get, and the same is true based on the length of time the account remains open. Savings accounts make for a great way to finance long term goals like buying a car or a house, but it also serves as another way to make sure you always have some emergency funds just in case.
A Retirement Fund
Retirement funds are akin to savings accounts in that it accrues value over time, but there are a few key differences that mean that having both, rather than one or the other, is key to a prosperous future. For starters, paying for retirement is its own major priority, as being out of the workforce for potentially as long as 40 years requires some kind of income to cover expenses. This means that retirement funds shouldn’t be used for other expenses along the line, but the money in your retirement account can be used if it’s absolutely necessary. Another key difference is that the retirement saving process is fairly automated. Payments can be withdrawn from your salary with little to no involvement from you. This is a helpful alternative to manually depositing funds, as you remove your choice and the need for willpower.
Consistent Medical Coverage
Medical coverage is also essential. Why some who are safe and healthy enough may deem it unnecessary, medical insurance is crucial, because you can’t afford to spend the amount of money that medical services typically cost. While some simply can’t afford it at all, others simply shouldn’t shell out that kind of money, even if they can. It simply detracts too much from your funds both in the short term and in the long run. With the cost of medical insurance scaling approximately with your income, there’s no reason not to pursue consistency coverage just in case. If you have a chronic medical condition, this is substantially more true, as treatments will be needed indefinitely.
Preparing for the future may seem like something that isn’t relevant right now, but it is crucial to do so. While it is important to prepare for inevitabilities like aging, it’s also vitally important to be ready for unforeseen circumstances that can drain your resources if you’re not careful. However, these tips can form the foundation of a more prepared and sustainable lifestyle.