The term HENRY (High Earners Not Rich Yet) refers to individuals who have the potential to become wealthy in the future because of their income. These individuals or families earn between $250,000 and $500,000 per year and are between 25 and 45 years of age (Gen Z, Millennials, and Gen X). Despite their income, after paying their living costs, taxes, and other expenditures, HENRYs have little left over to save and invest for their retirement. HENRYs are a demographic that politicians consider being ‘rich,’ referring to them as the wealthiest Americans during the 2008 elections. However, there’s more to the HENRY story.
For some people, retirement is all about the numbers, the age you plan to retire, how much money you need, and so forth. We have built our planning processes in financial services based on numbers and algorithms in financial planning software to help us contrive a numeral or group of numbers that are uniquely yours. But is retirement really about numbers?
The past 100 years have seen changes in how people plan for their financial futures and how they live. Borders no longer restrict people from living in one country; their profession often takes them to parts of the world they never anticipated. Today, it’s not uncommon for a family to live part-time in one country. Or become citizens of another country to work or have a business there. Living globally is a lifestyle that many high net worth families, and others, are choosing. Financial planning and living globally what are the risks?
In a recent study conducted by the ‘National Retail Federation and Prosper Insights and Analytics’, it was found that the average American family will spend just south of $700 for back-to-school costs in 2019. Is your child soon to be a college student? The same survey reported you should be ready to spend a little less than $1,000 alone for start-up school supplies. While this cost seems large, it’s just a part of your financial portfolio. Back-to-school time is not only a great time to plan a scholastic budget, but also reviewing and reassessing your financial plan.
Below is your Official 2019 Back-To-School Financial Guide to make sure your student, and your financial goals, stay on track:
How has your year progressed in terms of finances? Have you met or succeeded in your goals? Developing a spreadsheet and comparing where you were at the beginning of the year to where you are now can help you asses how aligned you are with your financial goals. Building this report toward the latter of the year will also give you time to adjust your plan (if needed), throughout the remainder of 2019.
Life happens, which is why insurance was invented. Whether you want to provide for your family in case of an emergency or someone forgets to turn off the stove…again; insurance of all sorts can help cushion the blows to your wallet and financial well-being. However, just as life is always changing, so too are your insurance needs and costs. Once a year, you should reevaluate your insurance needs and coverage for any change. While you may not be able to change health insurance in the middle of the year, items like car and home can be changed with a little research and not much effort.
Regardless if you are married, single, with or without dependents, it is crucial to create and maintain a workable budget. Life changes on a regular basis and your budget must coincide with your current income, needs wants, and goals. Back-to-school time is an ideal time to revisit your budget. It’s a relatively slow time on the tail end of summer travels and on the steps leading up to the holiday season. Budgets should be regularly checked throughout the year and especially after any life changes like marriage, death, education, etc.
Now is the best time to make sure you are receiving the most tax breaks you can on income for 2019. Items like 401(k), charitable contributions, and retirement contributions are all fantastic ways to reduce your tax liability. Consider boosting certain contributions to reduce what you’ll pay in taxes. While ‘tax season’ is still months away, it’s important to start looking at your 2019 year from a financial perspective and start looking out other ways to save on taxes before years end.
Back-to-school season signifies the approach of cooler weather, the quick onset of school costs, and the ultimate approach of years end. Make sure you have a great start to 2020 and finish off 2019 by utilizing this guide when looking at the remainder of your financial year. Although these are good recommendations to start with, you should connect with a financial professional to see where you are on your financial journey and how these tips could benefit you.
Disclosure: This information is provided as general information and is not intended to be specific financial guidance. Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives.
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Traveling abroad or living abroad is a new normal for many people, but what happens if the traveler dies while off U.S. soil? Will the life insurance be valid and payout to beneficiaries? Not all life insurance companies view travel outside of the U.S. the same and may not pay out benefits.