There are many different types of financial planning, but all fall into one of four main categories. These are income, expense, asset management, and liability management. The type you need depends on your situation, which means there’s no one-size-fits-all approach to financial planning. If you’re just getting started, here are the basics of the four main types of financial planning so you can decide which you need the most help with right now. The Four Types of Financial Planning You Need to Know About
General Insurance
You will want to be sure that you’re covered in the event that something unexpected happens. General insurance is a term often used when referring to health, property and casualty, life, disability and dental insurance. Talk with your advisor about the types of general insurance coverage you may need. The Four Types of Financial Planning You Need to Know About
Retirement Plans
Retirement is a point in the future when you will stop working, typically after you have been at it for about 40-45 years.
It’s important to plan for retirement now, because you don’t want to retire into poverty. One important type of retirement plan is a 401(k), which is a tax-deferred employee contribution plan that most companies offer today. Other types are 403(b)s, Individual Retirement Accounts (IRAs), and Roth IRAs.
Property Insurance
The only type that can protect your most valuable asset – your home. Property insurance covers damages and repairs after a disaster, such as a fire or burst pipe. Whether you need to rebuild your entire house or replace just the kitchen cabinets, you’ll be covered. In other words, it helps you get back on track without worrying about being denied for an additional loan because of the damage costs.
Health Insurance
Many individuals assume that health insurance is only for people without any other form of coverage. In reality, the reverse is true – having a solid backup plan in place can provide peace of mind and reduce the burden on your finances should you ever find yourself in need. A major reason for this is that the cost of healthcare has been increasing at a pace that outpaces wage growth in recent years and those without health coverage typically incur substantial costs from medical bills.