A Burden When Growing Old A Case of Financial Independance

Do you have parents in their twilight years now and have experienced taking care of them? Or maybe your friends are in that situation? I know you will agree with what I am going to say that such a predicament is a serious matter.

The medical bills, the care-giving expenses, the cost of adult diapers can eventually pile up and correct me if I am wrong, this set up may slowly take away a little of the love children have for their parents, and that is the most sad part of it all--slowly, day by day. What will remain is the burden of caring for the old ones.

Certain people have the idea of retiring and growing old with their kids, and their kids to "pay back" their kindness as a parent by taking care of them when they grow old. Do you really want to be a big burden on your children's backs when you get old?

It is safer to say that careful financial planning should be done, preferably starting the day you got your first job. That will ensure that your children will love you when you grow old. Financial planning need not be boring. It only becomes monotonous when you are talking with a consultant who wants to make it sound complicated and difficult to understand it so you would continue hiring his services.

Financial planning, in layman's terms, is finding out where you stand right now financially, and where you want to go, and coming up with a financial plan to go from here to there. It is that simple, isn’t it? But always bear in mind that it must do these five simple steps: beat inflation, minimize taxes, manage the unexpected, provide money for special expenses, and enrich your retirement.

Beat inflation. There are several loopholes in each person's investments and inflation is one of them and definitely, the biggest. An inflation rate stated by the statistics office for a certain year, for example, means your $100 in a time deposit account, will buy only a smaller amount of dollars ($98 for example) when you withdraw it on the next year. So make sure your financial planning strategy will include savings and investment instruments that would beat the inflation.

Minimize taxes. You may opt for tax-free investments to avoid income taxes and tax-deferred investments to postpone these tax deductions. In this way, your funds can grow at a faster clip.

Manage the unexpected. Health and life insurances are necessary for when things you don’t expect do occur, for example, accidents like fire or even death. Listen to your agents with care and be careful of the marketing propaganda for high commission insurance products.

Offer money for special expenses. Special expenses here refer to items like tuition fees, or purchase of a car and a house. There is an instance where a couple has done everything to budget their income but all their intentions went all in vain. They failed to set aside money regularly for emergencies. They end up using their credit card and thus now find it hard to keep up with their own monthly dues.

Enrich your retirement. Enhance your Social Security with a clear plan on how you can finance your retirement. With a regular income during your retirement, visiting your children and even your grandchildren will be a pleasure, and not a pain.

Once you have formed your strategic retirement plan, it is up to you to make your own plan work. After all the planning and arrangement, developing the plan is one thing, and sticking to it is another.