Finances After 55. Sylvia Lim

have prepaid their respective funeral arrangements.

      10. They have purchased critical illness insurance, paying them $50,000 each should they become terminally ill as defined under their policies.

      11. John has guaranteed their son John Junior’s personal loan of $2,000, which John Junior is expected to repay in full.

      They are comforted by the knowledge that —

      • they have savings set aside for emergencies, which are sufficient to support them for the next six months;

      • they have investments inside and outside their retirement accounts;

      • their debts are small and manageable;

      • they have insurance coverage (such as property, life, health care and critical illness insurance) to protect themselves against certain unexpected perils; and

      • their home can provide them with options for additional income. (These options are discussed in Chapter 8.)

       Sample 2: Net Worth Worksheet

      

      When calculating your own net worth, don’t rush. Take your time. You may want to take a break or two, if you need to do so. Remember, your net worth is a financial snapshot of what you’re worth as of a particular moment. Keep taking those snapshots, at least once a year, to measure how you are progressing, and assess whether or not your progress is sufficient to fund the kind of retirement you want.

      Can you supplement your income from investments and retire? Do you need to work a few years longer? Can you downsize your home and change your net worth snapshot for a better retirement? These and other questions can be answered only after the snapshot is taken.

      This process is a crucial one, as it is one of the starting points for planning all phases of your retirement. Use the Net Worth Worksheet to complete your financial snapshot today.