Guardianship for Your Children—
A Look at the Issues

     Selecting a guardian for your child(ren) is a very personal and important decision. You want to choose someone you can trust. However, you also need to select someone who understands that guardianship is an obligation that should not be taken lightly.

A Look at the Issues

     For potential guardians without children, suddenly having children to raise may require an unexpected change in lifestyle. And those who already have children may have to integrate additional children into their family. It is difficult to know how well children will adjust to siblings who are not their biological brothers and sisters. Suppose the guardian is a friend and not a blood relative. Will your family members make the situation even more difficult by second-guessing decisions the guardian makes?

     Assuming guardianship of someone else's child(ren) is a major financial responsibility. Too often, the respective parties may avoid addressing important financial issues, such as: Would the guardian be able and willing to assume full financial responsibility for raising your child(ren) or would he or she expect some financial provision to be made in your will? For instance, should the guardian be designated the beneficiary of your life insurance policies in the event both you and your spouse die? Is there sufficient life insurance to help pay for the cost of raising your child(ren), including higher education expenses? If assets are to be placed in trust for the benefit of your child(ren), how will the trust be administered? Will your guardian have any role in controlling the trust assets? In short, are you confident your finances will be handled adequately?

Finalizing a Commitment

     Even if you have chosen a guardian for your child(ren), your decision is not binding unless a court formally appoints the guardian. Generally, a court will not force people to serve as guardians against their will, even if they have previously agreed and were named as guardians in the deceased parents' will.

     When selecting a guardian for your child(ren), you may want to discuss the important issues mentioned above. Everyone will be well-served by a frank airing of expectations. You will gain peace of mind from knowing a caring individual will raise your child(ren) in a loving, supportive environment. Your guardian will better understand the financial nature of the responsibility he or she is being asked to assume. And, most important, your child(ren) will benefit from being cared for by willing guardians.

Early Retirement:
Is It Viable?

     Today, many people contemplate, or are forced into, taking an early retirement. With life expectancies steadily increasing, the chance of an individual spending one-third of his or her lifetime in early retirement is a distinct possibility. Naturally, the sooner you begin planning, the greater your chances of enjoying a successful early retirement.

     Qualified retirement plans and Social Security must generally be supplemented with personal savings. By maximizing your personal savings to the best of your ability, you will help increase your chances of securing a comfortable retirement. How-ever, it is important to note that individuals who desire an early retirement may incur certain penalties on early withdrawals from retirement plans. Also, inflation will have a direct impact on how long you can live comfortably on your retirement income. Due to financial necessity, or sometimes just an overabundance of leisure time, part-time work while retired may be worth serious consideration as an important part of your overall financial plan.

     One often overlooked aspect of retirement planning is money management, especially once retirement has started. Periodic reviews of your financial affairs with a qualified professional can help make sure you get on—and stay on—the right track.

Six Ways a Budget Can Help
Boost Savings

     At some point in your financial life, you have undoubtedly heard that it's important to develop a budget. But why is having a budget so important? Perhaps you feel you simply spend what you must and save whatever's left over. Or, you spend all you have and borrow or charge anything more you need. In either case, given the limits of your income, you may have wondered, "What good would it do to have a budget?"

     Whether you have substantial resources or live close to your means, a budget can serve as an effective foundation for a family savings program. It provides one of the best tools to help you and your family control your personal and household expenses, and thereby free up income that you can redirect toward savings.

     How does a budget accomplish this? Consider the following six points:

1. Putting your family's actual expenses down on paper may surprise you by revealing an inefficient or ineffective use of your financial resources.

2. Once you see where your money is going, a budget encourages you and your family to conserve your financial resources or spend them more wisely.

3. A budget aids you and your family in anticipating financial problems that could arise from your present spending habits, thus allowing you to take corrective action to prevent difficulties from occurring.

4. Developing a budget can help you see the need for an alternative course of action to achieve your family's financial goals.

5. A budget motivates you and your family to stick to a savings plan, once you've committed yourselves to it.

6. Finally, a budget helps you evaluate and measure your family's progress toward meeting your long-range, financial objectives.

     Whether your family members dream of higher education, an early or comfortable retirement, or a special family vacation, a budget can help boost your savings, thus helping you bring your dreams closer to reality.

Smart Steps on the Road to
Financial Security

     Achieving a secure financial future doesn't necessarily require bold moves. In many ways, disciplining yourself with simple, routine practices may be more important for building long-term security. Here are a few time-tested strategies to put into practice:

Set one-, three-, and ten-year financial goals. Evaluate your financial progress monthly to ensure you are on the right track toward meeting your goals.

Pay yourself first. Before spending your paycheck, earmark a set amount for savings.

Seek qualified tax-deferred savings opportunities. Consider contributing to tax-advantaged retirement savings plans, such as Individual Retirement Accounts (IRAs) and 401(k) plans, if you qualify, which offer both tax-deductible contributions and tax-deferred growth.

Consider nonqualified alternatives as well. You might also want to consider nonqualified annuities, contributions to which are not deductible, but which do enjoy tax-deferred accumulation. This may be an option if you are unable to participate in a qualified plan, or as a supplemental savings vehicle if you've reached your contribution limit.

Trim finance charges and interest rates. Avoid high finance charges by paying off credit card balances monthly. If you must carry a balance, shop around for a card with a low interest rate.

Periodically review and update insurance policies. Meet with your qualified insurance professional on a regular basis to review and update your policies. They may require adjustments as the law and your circumstances change.

     Cultivating smart habits now can help put you on a path to long-term financial security!