Planning For Your Future

Most people are very familiar with the common tenets of financial planning, such as spend less than you earn and max out your retirement savings. However, there are a few pieces of advice that aren't passed around as often. Here are two things you need to factor in when organizing your money moves to meet your financial goals.

Look Out for Tax Advantages

Most people would prefer not to think about their taxes unless they absolutely have to, and it's not just because people hate having to dash off a check to the government. The tax code can be immensely confusing, and one wrong step could lead to an unwanted audit or being sent a huge tax bill. However, investing time and effort to delve into the tax code could help you keep more money in your pocket when tax season rolls around.

First, the tax code is full of loopholes that rich people take advantage of to increase their assets. For instance, the much maligned capital gains tax is one such loophole people use to pay less taxes on their income. The loophole lets you pay 15 percent income tax on any investment income you make rather than the 35 percent you must pay on your salary.

At the very least, trudging through the tax code can uncover deductions you may not otherwise have known about. For instance, home owners can deduct the interest they pay on the homes they purchase. If you move for work, you can deduct the associated expenses and reduce your tax debt.

You can lean about the various tax advantages that may be available to you buy talking to an accountant, or contact your local college or community center for classes professionals in the area may offer to local residents for free (or cheaply) around tax time.

Plan to Live to Be 100

Human longevity is another thing that doesn't get discussed as often. More and more people are living to be a century or more in age. Although the life expectancy rate in the United States is 78.8 years old, it's a good idea to create your plan under the assumption you'll live to be a hundred years old.

First, this will help you make the right moves to ensure you have enough money to pay for your living expenses until that time. It's sad but true that many elderly people are finding themselves in dire financial straits because they outlived their retirement fund. Second, thinking that far ahead will force you to confront the possibility of special needs you may have at that age and plan accordingly. For instance, you have to buy long-term care insurance by age 84; otherwise you won't be eligible for it after that and possibly during a time when you need it most.

There are other things you should consider when making your financial plan. Contact a financial planner for more information or help with your goals.