Planning for the Future: Smart Financial Moves from Insurance to Estate Planning
From insurance to investing, and from saving for grad school to navigating financial media, today’s wealth management requires more than just a steady paycheck. It takes foresight, discipline, and knowing which tools to use at each life stage.
In this round-up of expert advice from Ric Edelman and Sam Donaldson, we explore eight financial strategies designed to protect your assets and prepare you for the long haul.
1. Protect Yourself with Umbrella Liability Insurance
Umbrella liability insurance is one of the most affordable ways to protect your wealth from unexpected lawsuits.
Why it matters:
- It kicks in when your homeowner’s or auto insurance policy is maxed out.
- It can cover incidents like slip-and-falls, car accidents, or even a rogue grocery cart accident.
Coverage usually starts at $1 million, and premiums often cost just a few hundred dollars per year. If you have teenage drivers at home, now is the time to buy—before the risk increases.
Tip: Most companies require you to bundle your umbrella coverage with their homeowner’s or auto policies.
2. Retirement Planning: A 4-Step Formula
Ric Edelman’s retirement planning blueprint includes:
- Max out retirement contributions—go beyond the employer match if possible.
- Pay off credit card debt—ASAP.
- Build a one-year emergency fund—especially for retirees.
- Invest in a diversified portfolio—not just what’s trending.
A $4,000/month lifestyle means targeting $50,000 in cash reserves, but not before tackling high-interest debt. Start saving even if you’re still in debt—retirement waits for no one.
3. Thinking About an MBA? Plan Carefully.
A 22-year-old asked about saving for an MBA. Ric’s advice?
- Ask your employer about tuition assistance. Many companies offer reimbursement but require a few years of loyalty post-degree.
- Cut costs now—move in with family, reduce expenses, and avoid investing savings in volatile markets.
- Use a bank account, not the stock market, for short-term MBA savings.
Remember: an MBA is an investment—but it’s also a financial challenge. Prepare like you would for a business deal.
4. Structured CDs for Retirees: Proceed with Caution
Structured CDs may offer higher returns—but they come with tradeoffs.
For Marcia, a 65-year-old retiree, Ric recommended:
- Sticking with ordinary CDs for predictability if market risk causes stress.
- Allocating $100K–$200K of her $300K for moderate diversification.
Beware of salesy pitches. If it’s hard to understand, it’s probably not right for your retirement plan.
5. Wills vs. Trusts: What’s the Difference?
Wills:
- Public documents
- Go through probate—a costly, slow court process
- Often take a year or more before heirs receive anything
Trusts:
- Private and faster
- Skip the probate process entirely
- Can be customized to protect heirs, manage incapacity, or reduce taxes
Advice: Work with an estate attorney and update your documents as needed.
6. Buy Long-Term Care Insurance Early
Why now, not later?
- Premiums are cheaper when you’re younger and healthier
- It protects against the high cost of needing help with bathing, eating, or daily living
Don’t assume family will take care of you—25% of Americans plan to rely on relatives, but that’s not a reliable or fair plan.
7. Financial Media: Info vs. Noise
Financial TV has exploded—from limited news updates to 24/7 coverage from CNBC and Bloomberg. But more information doesn’t always mean better decisions.
Sam Donaldson’s take: Focus on the fundamentals, not the hype.
Ric Edelman’s advice: Be wary of “get-rich-quick” stories—they’re often fictional or exaggerated.
Separate investing from speculating by staying disciplined and avoiding emotional decisions.
8. A Light Moment: Reagan and the Recession
Sam shared a humorous memory:
When asked about a recession, President Reagan deflected blame by quipping, “That happened when I was a Democrat.”
The story was a reminder that even serious matters can benefit from a little humor—and that sometimes, financial clarity comes from cutting through political or media spin.
Final Thoughts: Protect, Plan, and Prepare
Wealth isn’t just about growing your assets—it’s about protecting what you have and planning for what’s ahead.
Whether it’s buying umbrella insurance, setting up a trust, or avoiding speculative investments, your best financial decisions will come from being proactive and staying informed.
All information provided is for educational purposes only and does not constitute investment, legal or tax advice; an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. The information contained herein has been obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals or points of view outside Edelman Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact us for more complete information based on your personal circumstances and to obtain personal individual investment advice.
Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances.
