Preparing your finances for the future extends past your budget into anything that might affect your finances over your lifetime and after. It’s a way to set yourself up for your best chance at financial success — and it can benefit you and your loved ones regardless of your age, career stage or marital/parental status.
This kind of planning is important, but we know it can feel daunting, and that’s why we’ve simplified a few things you may want to consider.
Emergency Savings
If you don’t already have some emergency savings set aside, it’s not too late to start. While the amount needed will depend on your situation, it’s a good idea to think about how much you needed for financial emergencies in the past or to frame your savings goal as your cost of living over a few months. If that’s not possible for you right now, having even a small amount of emergency savings can provide you with some financial security down the road. It can help to make a plan to reach your goal — maybe you opt to set aside part of your annual tax refund or set up a small part of each paycheck to flow into a savings account.1
Life Insurance
Life insurance should be a cornerstone of your long-term financial planning. While other planning tools can spell out your wishes, your life insurance policy can provide the money to carry out those wishes and help your family get by in your absence. It can be used to cover expenses — including final arrangements, medical bills, housing, education costs and more — so ensuring you have enough coverage is critical.
NEA Life Insurance is an excellent option for educators, featuring affordable rates, flexible options and plans tailored to their needs.
Estate Planning
While estate planning may sound like something for people with lots of money or assets, the reality is that the things you own and are responsible for — no matter how expensive or extensive — make up your estate. If something were to happen to you, an estate plan can help direct how you’d like things like real estate, insurance plans, savings accounts and belongings to be handled. It can also include critical details such as guardianship of your children and funding for their education. While some of these details can be included in a will, your estate plan is often broader and can include certain things that you’d like to occur while you’re still alive.
Estate plans can be made legally official with the help of an attorney or legal service, which can provide security and peace of mind for you and your loved ones that comes with clear, documented guidance about what you’d like to happen if you were to die.2
Advance Directives
Advance directives are documents that specify your medical wishes if you are unable to speak for yourself. These documents can include a living will, medical power of attorney and health care instructions, such as organ donation or do-not-resuscitate orders. They also can ensure you get the care you want and alleviate any uncertainty for your loved ones.3
You have the right to accept, reject or discontinue medical care for yourself at any point, considering your own beliefs and the fact that certain care can have large physical, emotional and financial impacts on you and your family. While advance directives may be a less obvious part of a financial plan, they can play an important role when it comes to the financial health of your loved ones and how you would like to live out your years.
Long-Term Care
Long-term care can be provided when you can no longer care for yourself independently, but it can be a very large expense. While this type of caregiving seems like something your health or disability insurance might cover, it is often limited or not included in coverage at all. While this may seem like something you don’t need to worry about until later in life, anyone can become sick, injured or disabled to the degree that they need this type of care — and having a plan is important.
In many cases, people pay for this type of care out of pocket, using their savings or retirement funds to help cover the costs. While this works for some people, other options are available. Government health care programs such as Medicare, Medicaid and several others can help with care-related costs, if you qualify. You can also privately finance this care using long-term care insurance — which can be a great deal less expensive to enroll in when you’re young and healthy — as well as other investments.4
Retirement Funds
If you work at a public school, you may be offered a 403(b) or 457(b) plan. 403(b) plans allow you to contribute to a tax-deferred investment account regularly and often feature a handful of investment options. 457(b) plans tend to offer fewer investment options but provide the perk of allowing catch-up contributions as you near retirement age. You can opt to invest in either or both, considering the pros and cons of each option.5
You can, of course, invest in other retirement accounts independently, such as 401(k)s, IRAs and Roth IRAs. If you leave your job, these accounts can work as rollover options for 403(b) and 457(b) accounts as well.
You may also have access to a pension plan as a part of your benefits. Your state may require a set number of years of work before you become fully vested or have rules around transfers into other retirement funds, so be sure to ask questions and make sure you understand your pension’s specific rules — especially if you plan to move schools or states — to help ensure you don’t hinder your chances to maximize this benefit.
If you’re looking for additional ways to invest money for retirement, the NEA-sponsored Retirement Program6 can be leveraged by NEA members to save even more.
Security Benefit pays NEA Member Benefits an annual fee. See disclosures.
Debt Forgiveness
If you’ve taken out student loans and meet certain requirements, you may be eligible for forgiveness or certain reductions. Even if it feels unlikely that you’d qualify, we recommend checking your status to ensure you’ve taken advantage of all of your reduction or forgiveness options. Lowering your monthly payment by even a few dollars can help you save more for your long-term goals.
1. “An Essential Guide to Building an Emergency Fund,” Consumer Financial Protection Bureau, 2024, consumerfinance.gov/an-essential-guide-to-building-an-emergency-fund/.
2. Julia Kagan, “What Is Estate Planning?” Investopedia, April 2024, investopedia.com/terms/e/estateplanning.asp.
3. “Advance Directives,” Johns Hopkins Medicine, 2024, hopkinsmedicine.org/patient-care/patients-visitors/advance-directives.
4. “Paying for Long-Term Care,” National Institute on Aging, October 2023, nia.nih.gov/health/long-term-care/paying-long-term-care.
5. Christina Majaski, “457 Plan vs. 403(b) Plan,” Investopedia, October 2024, investopedia.com/articles/personal-finance/111615/457-plans-and-403b-plans-comparison.asp.
6. The NEA Retirement Program (“NEA Program”) provides investment products for retirement plans sponsored by school districts and other employers of NEA members and individual retirement accounts established by NEA members. Security Distributors and certain of its affiliates (collectively, “Security Benefit”) make these products available to plans and accounts pursuant to an agreement with NEA Member Benefits (“MB”), which markets the NEA Program. Security Benefit has the exclusive right to offer the products directly or through other authorized broker/dealers, and MB in marketing the NEA Program generally may not enter into arrangements with other providers of similar investment programs or otherwise promote to NEA members or their employees any investment products that compete with the NEA Program products.
Security Benefit pays an annual fee to NEA MB for the exclusive right to offer the products in the NEA Retirement Program and to provide marketing, advisory, fiduciary and other services to NEA Members and for the NEA Retirement Program. In 2023 the annual fee amounted to approximately $4 million. Receipt of the annual fee creates a potential conflict of interest and gives NEA MB an incentive to partner with Security Benefit to make the Program available to NEA Members. To address this conflict, NEA MB conducts extensive on-going due diligence on Security Benefit to ensure that NEA Members benefit from the products and services offered by Security Benefit. NEA MB also discloses this relationship to NEA members in educational, marketing and promotional materials. You may wish to take into account this arrangement and any possible conflict of interest when considering and evaluating any communications or recommendations relating to NEA Retirement products.
NEA and MB are not affiliated with Security Benefit. Neither NEA nor MB is a registered broker-dealer. All securities brokerage services are performed exclusively by your sales representative’s broker-dealer and not by NEA or MB.
NEA Retirement Specialists, when making recommendations to an NEA member, offer only Security Benefit products.
Group Insurance coverages are issued by The Prudential Insurance Company of America, a Prudential Financial company, Newark, NJ.
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