Glossary

1035 Exchange

A method of exchanging insurance-related assets without triggering a taxable event. Cash-value life insurance policies and annuity contracts are two products that may qualify for a 1035 exchange.

401(k) Plan

A qualified retirement plan available to eligible employees of companies. 401(k) plans allow eligible employees to defer taxation on a specific percentage of their income that is to be put toward retirement savings; taxes on this deferred income and on any earnings the account generates are deferred until the funds are withdrawn—normally in retirement. Employers may match part or all of an employee’s contributions. Employees may be responsible for investment selections and enjoy the direct tax savings.

401(k) Loan

A loan taken from the assets within a 401(k) account. 401(k) loans charge interest and are normally paid back through payroll deductions. If the borrower leaves an employer before a 401(k) loan has been repaid, the full amount of the loan is generally due. If the borrower fails to repay the loan, it is considered a distribution, and ordinary income taxes may be due, along with any applicable tax penalties.

403(b) Plan

A 403(b) plan is similar to a 401(k). A 403(b) is a qualified retirement plan available to employees of non-profit and government organizations.

Long term planning mainly depends upon the establishing goals that you want to achieve in next five or more years. Strategic planning and management check the assessing relationships to make sure that each department’s objectives align to the company’s overall goals.

Importance of long term planning

Long term investment plan helps business leaders to think in a different way about the company’s direction. It also gives inspiration and imminent into the type of performance required to meet the business goals. Long term planning is very necessary when significant internal change is required to uphold the competitive advantages. When you are going for a job interview and the hiring manager asks you about long term planning than there may be a few things running through your brain for example “moving up the ranks,” “running this place,” “working for myself,” or “in your job,” but all these necessarily things can’t say out loud in an interview.

Example of a long term goal

For example, it is your long term goal to complete all of your GED exams but this could take more than a few years of going to school and studying. So, achieving these short term goals aids you to reach your long term goal. Long term goals are very important for a career planning.

Long term career plan

When you want to achieve your long term goals then you should prepare a long term career plan for the next five to 10 years, so you can develop a rational action plan for goals in this time period. Applying for an entry level job, becoming a team leader or mastering key skills all of these actions required suitable goals.

Examples of goals required for careers:

  • Learn a new ability or the latest technology.
  • Attain an endorsement.
  • Increase your management experience.
  • Develop better communication skills.
  • Develop leadership ability.
  • Prepare a long term career plan.
  • Improve competence rates with finishing projects.
  • Obtain a new job.

Objectives of long term goals:

Goals which acquire a longer time period to attain them are called long term goals. Long term planning includes life goals which are the big things to work for and achieve such as getting married and having a family, starting your own business, becoming a big-time executive, or traveling the globe. Life goals are basically everything you want to do in your life before going to die. So, once you have prepared your three to five year plan, you are ready for your short term annual plan that show you the path towards your long term goal.

Consider the following five steps while preparing your long term career plan:

  1. Draw your task.

It is quite simple, but you should put your long term career plan on a paper because it’s very powerful to have a written proof. After writing your mission now it’s time to make a strategic plan for your objectives. During making your strategic plan some questions should come into your mind that where are you headed, and what do you wish for your business to look like in three to five years? Write down your answer so you have something concrete to work toward.

  1. Set goal

To start work on your mission, first settle your long term goals which should be financially focused and that can help you achieve your overall mission. Develop a three to five year plan and foretell that matches your financial and overall business goals.

To get starting, initiate with the big picture means write down the superlative future you want to see for your business, and it should be related to your mission. Now it’s time to use the “SMART” method to get specific long term goals. SMART is a somewhat common set of criteria used by many people to establishing long term goals. It means your goal should be precise, quantifiable, realistic, applicable and time-bound.

Long term financial planning is a conjecture for your business and includes an expected balance sheet, income statement and cash-flow projections. Such a model aids you to create a road map of income and expenses to designate where you stand now and where you’re headed in the future. Use your long term financial plan to decide when and where to invest funds in your long term plan.

  1. Wide key strategies.

When you determined your long term goals, think about the overall strategies and general tactics required to achieve these goals. Your strategies may contain building out facilities, purchasing equipment, securing enough financing to achieve your plan and more.

After recognized these key strategies, now make a specific annual plan for these strategies. A strategy may help you to get specific look at the end goals. Catalog the costs and time related with hiring and training, and put steps in place to meet that deadline.

  1. Compute current Results

After writing your vision, establishing your goals and outlined your strategies and specifics, now it’s time to compute your progress. Choose practical benchmarks, and check your strategies are performing constantly. Try to be flexible every time to attain your long term investment plans. If you think that one strategy isn’t performing well then try to change it so that you can still achieve your long term goals. So, your strategies should be calculated and revisited when you aren’t beating results.

  1. Stay positive

For long term success, keep up your efforts but stay positive. Review and regulate the steps above to make sure you stay on your path. I thing you should remember that your plan doesn’t have to be perfect to achieve your long term goals and most importantly, don’t vacillate to ask for help. A financial advisor Birmingham Alabama at legacyal.com or even members of your team can propose direction and advice if you’re feeling jammed.

Without a plan, you can run the risk of failing. A long term plan can not only strengthen your bottom line but also help to keep you motivated.