– Prepare for children. Just like retirement requires planning, so does starting a family. For example, what will child care costs do to the family budget? How will the couple balance saving for retirement with paying for college? be recommendsÂ the couple visit the USDA’s cost of raising a child calculatorÂ to estimate how much it will cost annually to raise a child from birth until age 18.
Patrick says he plans to buy cash value life insurance to use the cash built up for the children’s college education. Wright says a 529 plan or other investing vehicle is a better option. They can set up an account before the children are born and transfer it from their names to the children’s once they arrive.
While Patrick currently has life insurance coverage through work, Wright recommends that they each get a supplemental policy, beyond what’s offered by an employer.
Patrick does not have disability insurance, so Wright suggests that he enroll in the group coverage available through Baylor, which will be the most cost-effective option for him right now.Â He will likely have to wait for the benefits open enrollment period, or for a change in status (such as marriage) to apply, whichever comes first.
“Because he is the sole breadwinner, it is very important that he have proper coverage in case he is unable to work for an extended period of time due to illness or injury,â€ Wright says. If he is unable to get coverage through his employer, Wright advises that he get an individual policy to provide disability protection.
What’s key for the couple’s long-term financial success? Maintaining their disciplined lifestyle. Says Wright, “They don’t have grandiose expectations. They are on the right track.â€