Refocusing Financial Goals

Sometimes, you need to rein things in a bit and refocus.

To maintain his lifestyle, Hoosier estimates he would need about $1 million in a retirement account to supplement a monthly income of $2,000. He has already saved $80,000 toward that goal by contributing 4% of his salary regularly and making extra contributions when he receives his monthly commission and a $3,000 quarterly bonus. Hoosier also has an additional $20,000 in a traditional savings account, putting aside whatever money is left over after his monthly expenses.

Hoosier’s other short-term goals are to pay off his $45,000 student loan in five years. “I don’t want to be paying these student loans until I am 50 or 60 years old. So the sooner I pay them off, the better,” says Hoosier, who also has a $10,000 car balance and $2,000 in credit card balances.

Hoosier is also stashing $2,200 per year into a whole life policy that will pay out a face value of $200,000 to his beneficiary, which is currently designated as his mom.

The Advice
To keep Hoosier’s wealth-building goals on track and to ensure they are not derailed by his ambitious plan to meet his family needs, black enterprise and Ted Parrish, principal and director of investments at Henssler Financial in Kennesaw, Georgia, recommend Hoosier take the following corrective actions:

• Put second home on the back burner. Hoosier shouldn’t rush into purchasing a new home just to accommodate visiting family.  Instead, he should wait at least two years before purchasing a new primary residence to allow for a housing market correction. “Most likely, housing prices will remain affordable and allow Hoosier to make a solid investment in a new primary home over the next couple of years, after he has refinanced his current property,” says Parrish. Waiting will also give Hoosier time to save for a 20% down payment on a new property.

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