The term “financial wellness” can have different meanings for different generations: A Boomer may factor in retirement income, while Gen Z may primarily be looking at student loans and credit card debt.  

Prudential Insurance and financial planner Tim Bosworth visited with City of Round Rock employees in September to assist with financial needs, planning and protecting against risk. In case you missed this informative series, here’s a rundown:  

Establishing a budget 

Before moving forward with financial planning, take time to establish a budget. Elements of a budget include:  

• Potential sources of income 

• Fixed expenses (needs) 

• Variable expenses (wants) 

Setting up a good budget can help you curb impulse purchases, determine expenses in retirement and find ways to save money. It can also play a large part in reducing emotional stress, as well as being prepared for emergency expenses.  

Savings options abound 

Once you have a budget, you are ready to grow your savings nest egg, but understanding the different ways to do so can be challenging. Among the various savings and investing vehicles are:  

• Savings account: a type of deposit account offered by banks and credit unions that allows you to store money securely while earning interest on your balance.  

• Certificate of deposit: a type of savings account offered by banks and credit unions that holds a fixed amount of money for a certain time period – ranging from a few months to several years – and pays interest in return. Certificates of deposit typically offer higher interest rates than regular savings accounts, including high-yield savings accounts. 

• Individual stocks and bonds: two types of investments, with varying aspects: 
  • You own a piece of a company when you own stock. You’ll earn money when the price of the stock makes gains, and when corporations make payments to its shareholders. 
  • Bonds are ways of lending your money to companies and governments. They pay out interest plus the principal when they reach maturity.  
  • Stocks typically carry higher risk than bonds 
• Mutual funds: pool money from multiple investors to buy a diversified portfolio of stocks, bonds or other assets. Think of them as groups of different investment options.  

• Annuities: investments made with insurance companies. The company pays you back over time, either for a fixed time or for the rest of your life.  

• Treasury bonds, bills and notes: lending money to the U.S. government in exchange for the principal plus interest over time. Upon maturity, you’ll receive the money you put in, plus interest. They can have varying maturity periods, ranging from four weeks to 30 years.  

Considering saving for college 

Those raising children may want to look into college savings accounts, which are often tax-free when used for qualifying education-related expenses. Among them are:  

• 529 Plan: Sponsored by states, state agencies or educational institutions, these accounts may allow contributions to be made anywhere in the United States, and authorize that beneficiaries can be changed. Texas offers the Texas College Savings Plan and Texas Tuition Promise Fund. 

• Coverdell Education Savings Account: Like a 529 Plan but caps contributions at $2,000 annually per beneficiary. Coverdell ESAs are aimed at helping middle-class families, capping income limits, and provide a wide range of investment options.  

Retirement options 

Once the kids are out of the house, the attention often turns to retirement, but ideally, you’ll want to put the focus on it much sooner than that. Among the retirement options are:  

• Individual Retirement Accounts (IRAs): Typically come without income limits, and contributions are tax-deductible. Withdrawals are usually taxable, though.  

• Roth IRAs: Can be withdrawn as early as age 59 and provide tax-free growth and withdrawals 

• Company-sponsored retirement plans:  
  • 401(k) plans: Employees contribute a portion of their salary into investments that grow over time; often made available through private sector employers 
  • 403(b) plans: Tailored to public and nonprofit sectors and similar to 401(k) plans 
  • 457(b) plans: Similar to 401(k) and 403(b) plans but offered to employees of state and local governments 
  • Pension plans: Usually funded by employers, they provide regular income after retirement, often based on salary and years of service. 
  • Thrift Savings Plan/Military Retirement: For federal employees and members of the military; 1 percent of base pay is set aside to the account and the government matches up to 5 percent  

When setting aside funds for college or retirement or simply investing, consider diversifying your assets, in order to maintain sizable yields while mitigating risk. Also, feel free to explore different options or to speak with a financial planner to assist you with your fiscal goals.