This Father’s Day, take some time to make sure your family’s financial future is in order. With important steps like opening a college fund and making a will, the earlier you do it the better. Here are 3 things all new parents must do to make sure their family will have everything they need.
Open a College Fund
Saving up for college is one of the best ways parents can provide their kids with a solid start to adulthood .The first step is to open a 529 account, which is a tax-shielded account you can put savings into without paying taxes on the interest earned.
If the money is used for college expenses, the withdrawals are also tax-free. If you or your child need the money for something aside from college, you can still make withdrawals. They just won’t be tax-free.
Once you have the account, the next step is to calculate how much you need to deposit each month in order to have enough by the time your child is ready for college.
Make a Will
Making a will early on is important. Not only does it ensure your assets go to the beneficiary of your choosing, it’s also the document where you appoint a legal guardian for your children and where you make final arrangements so that your loved ones don’t have to go through the stress of planning a funeral when they’re already grieving.
On the Fabric App, you can make your will for free or open a 529 plan. The platform makes the process as simple as answering a few questions. Based on your answers, the app generates a filled-out, customized will for you. After that, all you have to do is print and sign it, along with two witnesses to make it legally binding.
Make Sure You Have Enough Life Insurance
If the assets your family will inherit aren’t currently enough to replace the income you provide, life insurance is one of the best ways to cover the gap. Figuring out how much coverage you need can be tricky. You could have some coverage already through an employer-provided policy. You might have different financial goals to fund, like college funds, weddings or a mortgage.
Take some time to calculate your various long-term financial goals and what percentage your income contributes to those goals.
If you need some assistance in calculating how much insurance you need, Fabric can help you. Complete their short quiz to get started.
As a new parent, taking the time now to ensure your family’s future will give you the peace of mind that your family will have everything they need, no matter what comes your way.
Life happens. It’s best to be prepared for it.
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