These Are The Small Financial Steps Corporate Executives Should Be Taking Now To Secure Their Future
There’s no doubt that business executives make good money. However, all the hard work they’re putting in today might just go to waste if they’re too busy to manage their finances the best way possible. Fortunately, one doesn’t really need more than 90 minutes a week to put habits that would grow or keep their wealth safe into place.
Maxing Out One’s 401(k) Plan
Perhaps the easiest thing a business executive can do is to find out how much they automatically contribute to their retirement plan every paycheck. If the contribution made isn’t the maximum one that’s allowed by law, make sure max out one’s 401(k) plan savings and never decrease the contribution percentage. Doing so can lead to savings worth thousands of dollars in income tax.
The next thing they can do is to allocate most of these contributions towards investment instruments like bonds, stocks, and cash. Meanwhile, those still in their 20s or 30s should consider taking advantage of the time they have to focus on stocks as they give the highest return on investment over a long period of time.
Older people should keep their stock allocations to 70% max to avoid huge losses when the stock market suffers. However, both young and old executives should settle the beneficiary of their plan in case they perish untimely.
Avoiding Dependent Wealth
While corporate executives enjoy having the perk of holding stock in the company they work for, this can eventually be a disadvantage. For example, the plummeting of one’s employer can also lead to one’s net worth to suddenly crash with it.
It’s best to err on the safe side especially if one is already near the age of retirement. People are recommended to keep their company stock only up to 15% of their total assets. Consider diversifying the stocks one’s 401(k) goes to instead of keeping it all invested in the company. A good way to do so is by dividing one’s investments among bond funds and stock funds.
The Importance of An Estate Plan
A lot of people either don’t have wills or have ones that have been drafted decades ago. This may spell danger as dying without an estate plan can put loved ones’ financial welfare in jeopardy. At the end of the day, getting an estate plan drafted would be much less expensive than the potential legal bills that can accumulate when one passes on without having their finances in order.
Meanwhile, those who have had their estate plans figured out should consider reviewing and maybe updating it every five years or so. This would be a particularly good route for married couples who made their plans when their children were still young.
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