The three biggest financial risks in life are:
1. Getting disabled or falling ill and not being able to work
2. Running out of money before you die
3. Dying unexpectedly and leaving your loved ones in a tight spot
The three broad solutions are:
1. Make sure you have disability and critical illness insurance (sometimes people have full or partial coverage through their benefits at work. Happy to help you sort through those specifics and figure out what you actually need.)
2. Create and implement a retirement plan right now. (This will include thinking through what you want retirement to look like, how you’ll spend your time, what will give you purpose, etc., and also what investments you’ll need to make to get there, likely including tax-advantaged accounts like your TFSA and RRSP, real estate, whole life insurance, etc.)
3. Getting life insurance to cover not just your current debts and funeral expenses, but also any lost income your loved ones would be depending on to maintain their lifestyle.
Lots of people think of themselves as being risk averse or wanting to play it safe, but at the same time, don’t have enough or the right kinds of insurance in place, or aren’t investing aggressively enough for retirement.
These are big items to tackle and are easy to put off. But you’ll have more peace of mind, feel a lot more secure, and be in a better place financially the sooner you protect yourself against life’s biggest financial risks.