No matter how diligently you plan for your future, if you’re not watching out for the major threats to your finances, your plans could still fall apart. Knowing and understanding the potential risks to your financial security allows you to better plan for them. Freedom Debt Relief provides insight into four of the biggest threats to your financial security. If you haven’t already addressed these in your finances, now is the time.
Outliving your money.
According to the U.S. Social Security Administration, the average male will live to age 84.3 and the average woman will live to age 86.6. Keep in mind that these are just averages. Some individuals will live past age 95. Your goal should be to have enough money to last for the remainder of your life, recommends Freedom Debt Relief. Even if you could, you won’t be able to work your entire life. That means you’ll have to put some money aside in a retirement account so you can live comfortably in your old age.
Not saving early enough.
If you’re not saving money regularly, you may already be behind where you should. Not only do you need money in an emergency fund in case of a job loss or other unexpected expense, you should also be putting money toward retirement. The earlier you start saving, the more your money has time to grow, recommends Freedom Debt Relief. And time is very important when it comes to reaching your retirement savings goals. Review your budget and look for ways to cut back so you can start contributing to your savings right away.
Having your identity stolen.
Identity theft is one of the fastest growing crimes. With companies losing millions of customer data every year, we’re all more at risk of identity theft than ever. If a thief gets access to your name, social security number, and date of birth, they can open up accounts in your name, leaving you to deal with the fallout. Once your information is exposed, you’re forever a risk of identity theft. The best way to deal with the risk of identity theft is to freeze your credit report so that new credit accounts can’t be opened in your name. Signing up for identity monitoring can also give you early warning that your sensitive information is being sold on the internet.
Unexpected life changes.
Job loss, disability, divorce, and loss of parents are all examples of life changes that pose a significant threat to your financial security, says Freedom Debt Relief. If any of these happens unexpectedly and you haven’t prepared for it, your entire financial life can go into disarray. For some, major life changes are devastating to the point that they can’t be recovered from. Preparing for these with a solid emergency fund, the proper insurance, and the right financial documents can help you navigate the changes.
Striving for financial security can be a lifelong endeavor. Freedom Debt Relief recommends reviewing every aspect of your finances to be sure you have all the bases covered when it comes to your financial security.