Whether you want to know more about how to manage your money better or consider yourself a savvy money manager, personal finances are complicated. Market shifts, tax policy changes, economic fluctuations and big or small life events can have an impact on your financial plan, and there’s always more to learn about how to manage your money better.
For example, as your family grows, you might want to think about setting up an estate plan—but what does that involve, exactly? Or perhaps you received an inheritance or unexpected windfall: Does that mean you can or should retire early? While your financial situation is unique, knowing the answers to these kinds of questions may help you feel more in control of your finances.
Below, we’ve answered some common financial questions and included links so you can learn more about how to manage your money better. If you have a question that isn’t answered here, financial professionals with U.S. Bank and U.S. Bancorp Investments can provide personalized financial advice and guidance.
Common financial planning questions
Personal finances can be complex, so the first step is to create and maintain a customized financial plan. It should address some of these key financial planning questions to help you stay on track as you work toward your financial goals.
Q. How do I know I have enough in my emergency fund?
A. Having an emergency fund means you would be covered in the case of a change in your circumstances, such as losing your job or encountering unexpected medical expenses. While the amount of your emergency fund will vary based on your financial circumstances, the general suggested amount is enough to cover three to six months of your total monthly expenses. Learn more:
What’s in your emergency fund?
Q. Is there such a thing as “good” debt?
A. The word “debt” can sound intimidating or negative, but it’s not a black and white issue. It’s important to differentiate between debt that can help move you forward toward your personal financial goals and debt that can set you back. This article gives you more information.
Good debt vs. bad debt: How to know the difference
Q. When is a good time to buy life insurance?
A. It depends. Your age and the reason you want a life insurance policy are key factors in answering this question. Read more about this decision in this article.
How much life insurance do I need?
Q. What should I include in my financial plan?
A. A strong financial plan that’s tailored to your circumstances should consider every financial element of your life, including your short- and long-term financial goals. Here are some recommendations:
Common investing questions
Whether you’re new to investing or have years of experience in the markets, answers to these common investing questions can help build your confidence and, potentially, your portfolio.
Q. How can I make sure my investment portfolio is positioned for growth?
A. A diversified portfolio includes a variety of investments that have different expected risks and returns. The goal of diversification is to both enhance and preserve your portfolio’s value. There are a number of investment diversification strategies you can use.
7 diversification strategies for your investment portfolio
Q. What’s the difference between Roth IRA and traditional IRAs?
A. Traditional IRAs are considered tax-advantaged investment accounts and Roth IRAs are considered tax-free investment accounts since they’re funded with after-tax dollars. The article below provides more detail on them and how they compare with 401(k)s.
Roth IRA vs. traditional IRA accounts
Q. How do I know if my investments match my financial goals?
A. Investing is all about working toward a financial goal, whether that’s a once-in-a-lifetime vacation or retirement. Starting with that personal financial goal in mind will help you determine how to invest.
Do your investments match your financial goals?
Q. How does inflation affect the economy and my investments?
A. In short, it’s complicated. In terms of investing, rising inflation may have a negative impact on fixed-asset investments but a positive impact on adjustable-rate commodities. If you’d like to know more, this article can help.
Effects of inflation on investments
Q. How do interest rates affect my investments?
A. Interest rate cuts are meant to support and stimulate current economic activity, but it’s possible these effects could have an impact on your stocks, bonds and other investments. Rising interest rates can also affect your investments and other financial decisions.
How do interest rates affect investments?
Q. How can I protect my assets in a volatile market?
A. Volatility can make us feel nervous, particularly when it affects our hard-earned wealth, but remember that investing is a longer-term exercise. Try to keep your emotions in check and consider following these five steps.
Common retirement questions
Knowing when and how much to save for retirement is only the beginning. Get answers to often-asked retirement questions and visit the retirement planning toolkit for more guidance as you save, prepare for and live in retirement.
Q. How much money do I need to retire?
A. As with so many financial questions, the answer is: It depends. The amount you need will vary depending on your specific goals, timeline and financial situation. This article takes a deep dive into this question.
How much should I save for retirement?
Q. When should I start saving for retirement?
A. In short, start saving for retirement as early as possible. The sooner you start saving for retirement, the more you can take advantage of compound interest. But there are ways to catch up on retirement savings if you are starting later in life.
Saving for retirement at every age: A complete checklist
Q. How can I help my child through college while still saving for my retirement?
A. Fund your retirement first. After that, consider the five steps in this article to help you work toward your college savings goals for your children.
5 steps to help parents work toward college savings goals
Q. When should I take Social Security?
A. You can start claiming your Social Security benefits at 62, but you may want to wait longer if you’re able. Find in-depth answers to this and other questions in the article below.
Commonly asked questions about Social Security
Q. How do I know if I can retire early?
A. There are key areas you’ll want to take into consideration as you plan and prepare for your retirement to ensure you can retire at the age you want. This checklist may help.
Q. What should I do with my investment portfolio when I’m nearing retirement?
A. As you approach retirement, you might want to manage and minimize potential risk in your portfolio.
Q. How do I generate an “income” in retirement?
A. Rather than rely on a paycheck from an employer, you can select a retirement withdrawal strategy to generate cash flow in retirement from sources you’ve already established.
3 retirement withdrawal strategies
Q. How can I pay for healthcare costs in retirement?
A. As you age, your healthcare expenses will increase. Consider all your options, including Medicare, a health savings account and long-term care insurance.
Common tax planning questions
Navigating changing tax policies can be challenging. Get answers to some common tax planning questions below and visit our tax planning resources page for even more insights.
Q. How might tax policy changes affect me?
A. Tax policy is an ongoing conversation in Washington. While actual details of tax policy changes are not clear yet, being prepared is important.
Understanding potential tax law changes
Q. Should I take the standard deduction or itemize?
A. Whether you chose to itemize or claim the standard deduction, you’ll generally want to choose the deduction option that lowers your taxable income the most.
Q. What can I do to lower my taxes?
A. Having a variety of investment accounts with different tax treatments can help you lower your taxes now and into retirement. Learn more about tax diversification in this article.
A guide to tax diversification in investing
Q. How do taxes affect my investment returns?
A. Having a diversified portfolio that includes a combination of tax-advantaged, tax-free and fully taxable investment vehicles and investment accounts can help you manage the amount of taxes you pay.
Impact of taxes on investment returns
Q. How much of my charitable contributions can I deduct from taxes?
A. It depends on the charitable giving strategy you use. Different contribution strategies are more tax efficient, which is a win-win for you and your selected charity.
Common estate planning questions
Knowing the information and documentation you need as you begin your estate planning journey can help you feel better informed and more in control. Be prepared by getting answers to these estate planning questions.
Q. What makes up my estate?
A. Your estate includes anything of value that you own (your assets), from real estate to investments. It helps to start with a checklist.
Q. Why do I need an estate plan?
A. An estate plan gives you more control of how your affairs are handled. You choose who makes decisions for you regarding your finances and your health, no matter your age or level of wealth.
4 reasons you need an estate plan
Q. What’s the difference between a will and a trust?
A. Both documents outline what happens to your assets after you die, but a trust may provide more privacy in how you want those assets managed and distributed.
Estate planning documents: Living trusts vs. will vs. living will
Q. How do I know if I need a trust?
A. A trust may be right for you for several reasons, including if you’d like to avoid the probate process and keep your financial matters private.
5 potential benefits of setting up a trust
Q. What types of trusts are there, and how do I know which is right for me?
A. The type of trust you choose should reflect your unique wishes for how your assets are handled now and in the future.
Types of trusts: Choosing the right one for you
If you would like to learn more beyond these questions about how to manage your money better, financial planning professionals from U.S. Bank and U.S. Bancorp Investments can provide personalized advice and guidance.
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