They say that your 30s are the new 20s, but I'm not so sure. In your 20s, you were still figuring out where to live, where to work, who to date, and when to get married. Now, in your 30s, you're on the right path. You have a place of your own and a steady job. You might even have a spouse or a baby. You're looking to the future - and for ways to build your nest egg. The only question is...how?
If your New Year's Resolution is to MacGyver your finances, we've got just the thing.
Multi-Task with Life Insurance
To get the most bang for your buck, you want a tool that multi-tasks as well as your smartphone. Most people don't know that life insurance can do all the following:
- save for the future
- cut down on potential healthcare costs
- protect your family
- pass wealth onto the next generation tax-free
If you've already got a savings account and a retirement account, life insurance is the perfect finish to your financial trifecta.
MacGyver Tip #1: Choose Wisely
There are two tricks to getting all these benefits out of a new policy. The first is choosing permanent life insurance. This type of coverage lasts for a lifetime (as opposed to term, which lasts for a specific time period). It builds cash value over time that you're free to use for anything you want. You can put a down payment on a house, start your baby's college fund, start a business, or save it for retirement. The trick is getting your policy now, so the cash value has time to grow. By the time you're ready to send kids to college or retire, you should have a great nest egg to pull from.
MacGyver Tip #2: Add Riders
The second trick is to choose policy add-ons (called "riders") that give you more bang for your buck. These include: riders that let you access your death benefit if you need help paying for treatment for a serious medical condition, riders that let you access your death benefit to help pay for elder care when you need it, and a rider that cancels your monthly payment if you become disabled and can't work.
MacGyver Tip #3: Plan Ahead
If you're thinking, "I can't afford life insurance...I can barely afford my student loans," you're not alone. But if you put off your purchase until you're in your 40s, you might be making things worse. Life insurance rates are based on your age and health. It's in your wallet's best interest to buy young and lock in a low rate. If you put off your purchase and then find out you've got high cholesterol, for example, you'll wish you'd bought early.