You and your spouse should continue contributing 15% of your income to tax-deferred retirement plans despite other financial commitments. If either of you leaves the work force (for example, to raise children), consider opening a spousal IRA, which will allow you to continue contributing for retirement even if you are not receiving an additional paycheck.
A 529 College Savings Plan or an Education Savings Account is a great way to prepare for the rising cost of education. If you start saving sooner rather than later, your children may have more college choices and your payments may be easier.
Life insurance will help supplement lost income for your family in the event something happens to you. Be sure to purchase a policy that will sufficiently cover your household and other expenses.
Streamlining your portfolio makes it easier to manage and minimize costs. If you and your spouse have had multiple jobs, you may have several workplace retirement plan accounts. You can’t combine your retirement accounts with those of your spouse, but you can roll over your 401(k)s and consolidate your individual retirement accounts (IRAs) through an IRA transfer.
Draw up a will to direct how your property and other assets should be dispersed upon your death. Without a will, your state of residence will distribute your assets according to its laws. If you have children, be sure to appoint a guardian; otherwise, a court will make this decision for you. It’s also important to consider a durable power of attorney for your finances and medical care. Power of attorney should be given to someone you trust. He or she will have the authority to act on your behalf should you become incapacitated. You should also update the beneficiary designations on your retirement accounts for life-changing events such as marriage, birth, divorce, death, or a job change.
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