Are you prepared for the unexpected?

AMY DUNHAM, EDWARD JONES :::

When you’re working to achieve your financial objectives, you will encounter obstacles. Some of these can be anticipated — for example, you won’t be able to invest as much as you want for retirement because you have to pay for your mortgage. Other challenges can’t be easily anticipated, but you can still plan for them — and you should.

Obviously, the word “unexpected,” by definition, implies an unlimited number of possibilities. However, at different stages of your life, you may want to watch for some “expected” unexpected developments.

For example, during your working years, be prepared for the following:

Emergency expense: If you needed a major car or home repair, could you handle it? What about a temporary job loss? These events are costly — especially if you are forced to dip into your long-term investments to pay for them. To help guard against these threats, try to build an emergency fund containing six to 12 months’ worth of living expenses, held in a liquid, low-risk account.

Investment risk and market volatility: Extreme price swings are unpredictable, and they can affect your investment success. To defend yourself against wild gyrations in the market, build a diversified portfolio containing quality investments. While diversification, by itself, can’t protect against loss or guarantee profits, it can help reduce the effect of volatility on your portfolio. And here’s one more thing you can do to cope with the ups and downs of investing: Maintain a long-term perspective. By doing so, you won’t be tempted to overreact to short-term downturns.

Long-term disability: One-third of all people between the ages of 30 and 64 will become disabled at some point, according to the Health Insurance Association of America. Disabilities can be economically devastating. As part of your benefits package, your employer may offer some disability insurance, but you may need to supplement it with private coverage.

Premature death: None of us can really predict our longevity. If something happens to you, would your family be able to stay in your home? Could your children still attend college? To protect these goals, you need adequate life insurance. Ω

 

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

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