1) Get an estate plan in order
- See an attorney to draft will, living wills, powers of attorney.
- Consider setting up trusts for the children.
- Appoint guardianships for the children.
- Check beneficiary provisions on retirement plans.
- Check beneficiary provisions on life insurance.
As a preventive measure, read about the 7 ways you can accidentally disinherit your children.
2) Assess risk exposure
- Get adequate life insurance protection.
- Select a level term policy to contain costs.
- Purchase long-term disability insurance.
- Disability coverage should extend to retirement.
Check out Bankrate's Insurance Toolkit
, then get a free quote from Insureme.com
3) Establish emergency fund
- Recommended cash reserve: $12,000.
- Start saving in $24,000 emergency fund.
- Invest emergency fund in CDs, short-term bonds.
Not sure why you need an emergency fund? Check out our guide on Creating an emergency fund.
4) Prioritize debts
- Transfer balances from higher-interest credit cards.
- Pay off credit cards within 15 months.
- Next, pay off auto loans.
- Charge rent for second home that covers equity loan.
- Student loans may qualify for loan forgiveness.
- If student loans don't qualify, consolidate.
Eradicate debt with Bankrate's Debt-tackling tool kit
5) Implement long-term savings
- Calculate future retirement income needs.
- Determine funding gap, if any.
- Save more for retirement if necessary.
- College funding may have to wait.
Bankrate's Retirement road map offers some direction.