Expand from building wealth to improving financial health
Saving and investing enough to retire comfortably is a worthwhile goal. But in order to get there, it can be helpful to focus on achieving broad-based financial well-being. Here are five tips for expanding your financial skill set and confidence on your way to well-being and wealth.
1 Pursue your retirement vision
Of course, you’re using your workplace retirement plan, IRAs, and other accounts to help create the wealth you’ll need for the future. But do you know exactly what you’re saving for? Actively explore your potential retirement lifestyle choices to boost your enthusiasm for that future today. What are you saving for? The chance to live in a certain location? Travel? A new hobby or interest? Or maybe even a small business of your own? Having a vision to aim for can help guide your financial decision-making along the way.
2 Have a purposeful plan for everyday saving
Although it’s satisfying to know that you’re contributing to your retirement balance, it’s important to make sure you have a solid foundation. Setting up an emergency fund can help you keep life’s unexpected expenses from damaging your financial health. And with additional dedicated savings accounts, you’ll have a better chance to stay on track with other goals that may not be as urgent but are still highly important.
Money for unexpected expenses
Money for financial goals
3 Become really good at managing debt and keeping a budget
When you’re trying to build wealth, it’s natural to think negatively about spending and debt. Yet, smart spending and borrowing can have a big impact on enjoying a good life.
The key is to make sure you’re not taking on too much unnecessary debt, such as relying heavily on credit cards to pay for items that you don’t have cash for. Make sure your debt is affordable, and pay off your credit cards in full each month.
And when it’s time to retire, you want to be carrying as little debt as possible, or at least at a level that won’t create a financial hardship when you stop working. Create a monthly budget to help you keep your spending in check.
4 Factor in the future with insurance and estate planning
While the cost of insurance may seem like another threat to your current wealth, it can help boost your well-being by lowering the financial risks you face every day. Life can change in an instant.
That’s why it’s important to make sure your family and property are properly protected and that your wishes will be followed should something happen to you. And that means you may want to consider investing in things like insurance policies, trusts, a will, and the advice of a trusted lawyer.
5 Take advantage of nearby expertise and planning support
If you have a 401(k) or other retirement plan available through work, it may include a broad-based financial wellness program, access to guidance from a financial professional, or both.
Evidence shows that taking advantage of such services can have a substantial impact on plan participants’ feelings about their financial well-being. Whereas slightly more than half of plan participants who don’t have access to either a workplace financial wellness program or a financial professional’s services described their financial situation as good to excellent, financial situations improved with the use of a financial wellness program, a financial professional’s help, or both.1
Retirement plan participants reporting a good-to-excellent financial situation
|Financial advisor and financial wellness program||93%|
|Financial advisor only||88%|
|Financial wellness program only||795|
|No financial advisor or financial wellness program||55%|
Source: John Hancock financial stress survey, 2022.
Factor in all the aspects of financial well-being
The lesson in all this? Broaden your financial perspective and skills to build a more solid foundation as you work to create wealth. Better yet, the guidance you need to help you achieve financial well-being can be as close as your retirement plan website or your local financial professional.
1 John Hancock’s eighth annual financial stress survey, John Hancock, Greenwald & Associates, July 2022. This information is general in nature and is not intended to constitute legal or investment advice. Greenwald & Associates and John Hancock are not affiliated, and neither is responsible for the liabilities of the other. This report presents the results of research conducted by Greenwald & Associates on behalf of John Hancock. The objectives of this study were to (1) quantify the financial situation and level of financial stress of John Hancock plan participants; (2) determine the key triggers of financial stress; (3) understand the extent to which actions, including actual financial behavior and planning activity, ameliorate stress; and (4) assess retirement preparation and readiness. This was an online survey of 1,162 John Hancock plan participants. The survey was conducted from 8/4/21 through 9/3/21, with an average survey length of approximately 19 minutes per respondent. Respondents were located from a list of eligible plan participants provided by John Hancock. All statistical testing is done at 0.95 and 0.99 significance levels. The maximum margin of sampling error at the 95% confidence level is 4.1%.
The content of this document is for general information only and is believed to be accurate and reliable as of the posting date, but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice (unless otherwise indicated). Please consult your own independent advisor as to any investment, tax, or legal statements made.
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