What is the sign of a good decision?®
It’s clarifying what you want to achieve, what you value and how uncertainties affect plans and
aspirations – turning plans into action and goals into reality.
Ten questions and answers
When thinking about how to protect your livelihood or build the financial resources you will need
to live life as desired, answer these 10 questions first.
1. What is important to me?
Before thinking about the right financial products for your needs, clarify what’s truly important
to you – the people you care about, the aspirations you have, the things you want to protect,
and the support you’d like to give to others. Whether you reflect on this question by yourself,
with family members, or alongside a financial professional – answer this first, as it will create
the framework around which your financial strategy can be built.
2. Who depends on me today and who might depend on me tomorrow?
This question should be at the core of your decision making process and should be answered
well before you consider what financial products you need and in what amount. Spouses and
children are often thought of as the most obvious dependents; however, there can be others
– for example, parents, in-laws or siblings who, due to age, disability, or other circumstances,
may be unable to care for themselves. Even individuals without a family have dependents –
namely, themselves – since their well-being depends on their own ability to earn an income.
With your list of current and potential dependents in hand, you will be better prepared to plot
your course toward greater financial security.
3. Who is providing for my dependents now?
Does someone in your family provide valuable non-financial support to those you care about?
Think of the stay-at-home parent – they may not support their family with earned income, but
the support they do provide is just as valuable as any paycheck. If a stay-at-home parent
were unable to provide that support, it would surely be expensive to replace. Account for all
who provide essential financial or non-financial support to your dependents.
4. What risks have I overlooked or not fully considered?
People may concentrate on the risk of premature or accidental death and overlook other risks
to their well-being and livelihood (for example, a breadwinner unable to work due to illness,
an aging parent unable to care for themselves, a retiree dealing with rising healthcare costs,
a business owner faced with a succession problem). As you work to construct your strategy,
be sure to think broadly about the financial risks you face today, or may face in the future.
5. Are my plans flexible enough?
There are ways that financial product solutions can be structured to provide future flexibility
and adjust with your evolving needs. When speaking with your financial professional, ask
about flexible solutions that can be upgraded (or downsized) as events in your life unfold.
6. How do I pick the right financial professional?
When choosing a financial professional, work with someone who is not only competent, but
also inspires your trust and confidence. The best financial professionals are good listeners
who seek to fully understand your circumstances and financial objectives before proposing
possible solutions. They should have access to product solutions from many fine companies,
should clearly explain how they get paid for their services, and should provide references
upon request. Make sure your financial professional has a solid support network behind them
since those affiliated with a strong, reputable firm will likely have access to better resources
to support your changing needs.
7. How do I pick the right financial services company?
Based on your specific needs, your financial professional should present product solutions
from companies that they highly regard and with which they have had positive experience.
Just as you will want to align yourself with a strong, reputable financial professional, you will
want to do the same with regard to financial services companies. In many cases, products
will be used to address financial needs and objectives that last for decades, if not a lifetime.
To help ensure that your financial product providers will be there when you (or loved ones)
need them, work with strong, stable companies that have received high marks from
independent ratings agencies such as A.M. Best, Standard & Poor’s, Moody’s and Fitch.
8. What if I already have a plan?
Even the best financial strategies should be revisited and updated regularly, generally at least
once a year. Common life events such as marriage, having children, changing jobs, or even
moving, can affect your existing approach. So, too, can just having another birthday –
particularly if it means you have reached a financial milestone, such as the year you can
begin collecting Social Security, receiving Medicare benefits, or taking distributions from your
retirement accounts. An experienced financial professional should regularly review your
strategy with you, to help ensure that it remains aligned with your objectives and appropriate
for your circumstances.
9. What is the downside of putting this off?
Developing a financial strategy is a critically important activity that should not be rushed;
however, there is a fine line between not rushing the process and not focusing on it at all. By
putting this off, we expose ourselves and our families to unnecessary risks and lost
opportunities – be it by not safeguarding our lifestyle from unexpected events, by not insuring
our livelihood and legacy while in a position of health and strength, or by not capitalizing on
even one extra day to build and protect our retirement nest egg. By actively focusing on this
process, you can help protect your interests and shape your future.
10. What am I waiting for?
You should now know what to consider as you develop your financial strategy and how to secure the
best resources to turn that strategy into a reality. Take the next step by doing additional research on
your own or seeking guidance from an experienced financial professional.
By: Sarah Tolson
© 2011 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001. All rights