Things to remember about financial planning | Chief of Port Townsend


If financial freedom is a life goal for you, a financial plan is essential. A comprehensive financial plan should be reassessed periodically to incorporate life changes. You can start at any stage in life with just a few small goals and build from there. Then, review and adjust your financial plan each year to optimize your performance.

Whether you’re just starting out or want to make sure you’re maximizing your savings, consulting a knowledgeable advisor can save you time and help you set achievable goals. This overview can help you determine what financial stage you are in and provide key advice to start building a solid foundation for your financial future.

Stage 1: early career

Early in your career, you may have already incurred student loan debt. A financial advisor can help you develop strategies to minimize that debt and make smart investments. It is important during these years to establish good credit in order to benefit from better loan rates and increase your purchasing power later.

While it can be difficult to get money out of those first paychecks, setting up a 401K earlier in your career can pay off when you retire.

“With your first job, it’s important to set up a Roth IRA or 401K retirement plan,” explained Earl Johnson, director of investment sales at First Federal Investment Services. “Even $20 per paycheck can make a difference when you’re letting decades of interest pile up. And with a Roth IRA, when you withdraw that income after age 59½ and the account has been open for at least five years, it’s tax-free.

Also, if you work for a company with a 401K matching program, find out the maximum amount your company will match and set it as a minimum goal for your contributions to maximize your 401K contributions.

Key points to remember:

  • Establish and monitor your credit score
  • Take advantage of 401k and business matching opportunities as soon as possible
  • Organize your money with multiple bank accounts
  • Build a budget and track your finances with tools like Money Management

Pictured: Earl Johnson, I
Investment Sales Manager at First Federal Investment Services

Step 2: Grow Wealth

By this point, you may have had several different jobs, started a family, or bought your first home. Each of these life decisions will have a major impact on your financial landscape. Regular health checkups with an advisor can help you tailor your financial goals to complement your life goals. They can also help you understand how to assess and optimize your current portfolio of assets.

“As you change jobs more frequently, it’s especially beneficial to have a long-term relationship with a financial advisor to help you adapt your plan as your life changes,” Johnson noted. “This stability can ease life transitions and give you an advocate in times of financial turmoil.”

Once you have children, preliminary estate planning becomes an essential part of an active financial plan. An advisor can help you plan new financial goals for you and your children, as well as weigh life insurance and inheritance plans. It’s also a good time to create an emergency, or “rainy day” fund for any unexpected expenses. During this stage of major life changes, having annual health checkups is key to optimizing your financial plan.

Key points to remember:

  • Diversify your asset portfolio
  • Start a rainy day fund
  • Review and adapt your financial plan after any major life change
  • Assess life insurance options
  • Start an estate plan

Step 3: Manage and preserve heritage

At this point, you want to protect the wealth you’ve accumulated, while continuing to optimize growth and manage expenses. You could also be faced with a new round of school fees for your children or mortgage payments on a new home or investment property.

Understanding your net worth, or your assets versus your liabilities, is key to making informed planning decisions. This stage is a crucial time to assess how close you are to the amount you need in retirement and to optimize your investments to help you achieve this goal.

Many people who have changed jobs several times during their career risk losing track of their past savings of $401,000 if they did not contact their former employers to switch them to their current plan or to a new one. retirement account. A financial planner can help you with this process to ensure that you don’t lose these investments.

Key points to remember:

  • Understand your net worth
  • Convert 401k from previous jobs
  • Carry out financial statements to optimize investments
  • Calculate how close you are to your target amount for retirement

Step 4: Distribution of wealth

At this point, it’s important to make sure you’ve properly budgeted for your retirement years and have a plan to deal with any lingering debt or expenses. If investment returns are a large part of your retirement income, you should weigh your risk tolerance against your investment goals. The tax rate on these returns is another important calculation in the proper budgeting of investment income.

This step is also the time to fine-tune your estate plan to ensure that your wealth will be distributed in the way you choose.

“A detailed estate plan can save your family the stress and uncertainty down the road,” Johnson added. “It’s also important to have different types of wealth distribution, like giving money to your heirs each year rather than a single lump sum down the road. A tax specialist can help you determine a good donation strategy.

Key points to remember:

  • Budget your retirement years
  • Refine your estate plan
  • Consider tax implications on investment returns and estate distribution

Photo: Michael Ivers, Financial Advisor at First Federal Investment Services (right)

Your future starts nowRetirement age can creep up quickly, so it’s important to plan ahead. A solid financial foundation will help you retire when you want and have the resources you need to take advantage of this new stage in life. Building an ongoing relationship with an experienced advisor can alleviate stress during financial transitions and save time adjusting your investments to life’s changes. However you decide to build your financial plan, now is the time to start!

To connect with a financial advisor at First Federal Investment Services, visit

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