FINC 321 - ASSIGNMENTS

MassMutual’s Top Ten to help you prepare for financial security and freedom.

There are many “Top Ten Ques0on” lists published throughout the financial services industry. But this list is quite different from those others. Other lists focus on ques0ons like – “how much life insurance do I need?” or “should I buy Term or Permanent life insurance?” or “how much money will I need in re0rement?”

You won’t find any of those ques0ons here. Because MassMutual and our affiliated financial professionals firmly believe that – when you think about how to protect your livelihood from certain risks, or how to build the financial resources needed to live your life as you wish – there’s a whole other set of ques0ons that you should be considering first.

In this Top Ten list, you’ll find ques0ons to help clarify what you want to achieve in your life, what you care most about, and how life’s uncertain0es could impact your plans and aspira0ons. And once you’ve answered those ques0ons, we’ve included some others that help demonstrate how you can take the next step, and actually start turning your plans into ac0on and your goals into reality.

We hope you find these Top Ten Ques0ons to be helpful and thought provoking as you consider your next move.

1. What is important to me? Before even thinking about the right financial products for your needs, you should clarify what’s truly important to you – the people you care about, the aspira0ons you have, the things you want to protect, and the support you’d like to give to others. Whether you reflect on this ques0on alone, with family members, or alongside a financial professional – answer this one first, as it will then create the framework around which your financial strategy can be built.

2. Who depends on me today, and who might depend on me tomorrow? This ques0on should be at the heart of your decision making process, and is one that should be answered well before you consider what financial products you need and in what amount. As a maRer of fact, answers to those more tradi0onal ques0ons of “what kind” and “how much” really depend…well, on your dependents! Think carefully about who depends on you today and who might in the future. While spouses and children are commonly thought of as the most obvious dependents, there can be others – for example, parents, in-laws or siblings that, due to age, disability, or other circumstances, may be unable to care for themselves. Even individuals who are single without a family have dependents – namely, themselves – since their wellbeing depends on their own ability to earn an income. With your list of current and poten0al dependents in hand, you’ll be beRer prepared to plot your course toward greater financial security and freedom.

3. Who is providing for my dependents now? Have you considered if there is someone in your family that provides non-financial, but invaluable, support to those you care about? Think of the stay-at home parent – they may not support their family with earned income, but the support they do provide is just as valuable as any paycheck. And if a

stay-at-home parent were unable to provide that support, it would surely be expensive to replace. For this reason, when you develop your financial strategy, it’s important to make sure that you account for all of the people who provide essen0al financial or non- financial support to your dependents.

4. What risks have I overlooked or not fully considered? A financial strategy is meant to protect you and your family from a variety of risks. While life insurance is usually a cri0cal component of such strategies, it isn’t the only one. When it comes to planning for financial security, people some0mes concentrate on the risk of premature or accidental death – to the point where they actually overlook other, more likely risks to their wellbeing and livelihood (e.g., a breadwinner unable to work due to an illness, an aging parent unable to care for themselves, a re0ree dealing with rising healthcare costs, a business owner faced with a succession problem). As you work to construct your strategy, be sure to think broadly about the financial risks you face today, or may face in the future.

5. Are my plans flexible enough? Life is filled with uncertain0es, and so no maRer how hard one tries, it’s difficult to lock in financial strategies that will account for every possible circumstance you may encounter. It’s these uncertain0es that some0mes prevent people from planning in the first place – there’s a lingering concern that if you don’t get it just right, then all your plans might be for nothing. But there is a solu0on. To build a strategy that will stand the test of 0me, in spite of a world filled with uncertain0es, it must be flexible. There is a whole host of ways that financial product solu0ons can be structured to provide future flexibility and adjust with your evolving needs. When speaking with your financial professional, ask about flexible solu0ons that can be upgraded (or downsized) as events in your life unfold.

6. How do I pick the right financial professional to work with me? Aside from you and your family, there are two key par0es who play cri0cal roles in this process – the financial professional who helps you plot a course, and the financial services companies that provide the associated product solu0ons. When choosing a financial professional, work with someone who is not only competent, but also inspires your trust and confidence. The best financial professionals are good listeners who seek to fully understand your circumstances and financial objec0ves before ever proposing possible solu0ons. They should have access to product solu0ons from mul0ple fine companies, should clearly explain how they get paid for their services, and should provide references upon request. Lastly, make sure your financial professional has a solid support network behind them – those affiliated with a strong, reputable firm will likely have access to beRer resources to support your changing needs for many years to come.

7. How do I pick the right financial services company to work with? Based on your specific needs, your financial professional should present you with financial product solu0ons from companies that they hold in high regard and with whom they have had posi0ve experience. Just as you’ll want to align yourself with a strong, reputable financial professional, you’ll want to do the same with regard to financial services companies. In many cases, these products will be used to address financial needs and objec0ves that

last for decades, if not a life0me. To help ensure that your financial product providers will be there when you (or your loved ones) need them, work with strong, stable companies that have received high marks from independent ra0ngs agencies such as A.M. Best, Standard & Poor’s, Moody’s and Fitch.

8. What if I already have a plan? That’s great. However, even the best financial strategies should be revisited and updated regularly – generally at least once a year. Common life events – such as marriage, having children, changing jobs, or even moving – can have important impacts to your exis0ng approach. So, too, can just having another birthday – par0cularly if it means you’ve reached a financial milestone, such as the year you can begin collec0ng Social Security, receiving Medicare benefits, or taking distribu0ons from your re0rement accounts. An experienced financial professional should regularly review your strategy with you, to help ensure that it remains aligned with your objec0ves and appropriate for your circumstances.

9. What’s the downside of puing this all off? Developing a financial strategy is a cri0cally important ac0vity that should not be rushed. There is, however, a fine line between not rushing the process and not focusing on it at all. Oken0mes, people tend to focus on those things that they know well, or that give them instant gra0fica0on – while postponing ac0on on things they’re unsure about or from which they don’t see an immediate benefit. When developing a financial strategy falls into that second category, it gets pushed to the back of one’s mind. By puing this off, we expose ourselves and our families to unnecessary risks and lost opportuni0es – be it by not safeguarding our lifestyle from unexpected events, by not insuring our livelihood and legacy while in a posi0on of health and strength, or by not capitalizing on even one extra day to build and protect our re0rement nest egg. But you need not resign yourself to these outcomes – by being conscious of these pilalls, you can overcome them. And by ac0vely focusing on this process, you can help protect your interests and shape your future.

10. So what am I wai0ng for? Hopefully, aker reading the preceding nine ques0ons, nothing! You should now know what to consider as you begin developing your financial strategy, as well as how to go about securing the best resources to turn that strategy into a reality. And, perhaps most importantly, you should now understand how to avoid the common pilalls that lead some to take what is perhaps the greatest risk of all – the risk of doing nothing. Now armed with all of this informa0on, we encourage you to take the next step – by doing addi0onal research on your own or seeking guidance from an experienced financial professional.

Source: hRp://www.massmutual.com/mmfg/pdf/10Ques0ons.pdf?desc=10Q