Family Financial Planning: “What Do Families Plan for their Financial Future?”

Wednesday, June 16, 2021

Welcome to my Wednesday Education (financial) B.R.E.A.T.H.S. blog where I am opening up a conversation around family finances and strategies to discuss money in each household. My family never talked about money, we only had one semester of personal finance in high school, and so we all had to find out about money the difficult way. I am here to change our money mindset so that our kids can learn how to manage money that will benefit them for the rest of their lives. Each week on Wednesdays, I will be giving pointers on how families can start talking about money.

Recently in Financial Education Wednesday’s 

Last month, I reviewed how children’s books and games can help families start the discussion about finances.  A few weeks ago, I explained the 5 W’s of Family Financial Planning. These five Wednesdays in June, I will break down the 5 W’s and highlight each area to better help families understand how to open up communication around how money works and everyone’s roles in family financial planning. 

The first week in June, I started breaking down the “Who” should participate by giving ideas on how children and adults can start talking about money at home. Last week, I discussed “Why” everyone should start family financial planning and make it an annual holiday party. Now that the family is starting to organize the annual family financial holiday party, this third week in June I will discuss “What” the family should plan for the financial planning portion of the party. 

What is Financial Planning for the Future?

Other than the present financial basics that were covered last week, like budgeting for income/bills, needs/wants, debt repayment, and tracking spending. This week I am going to cover what the family should discuss for their future financial goals. It wasn’t until my mid-thirties that I realized I should probably start planning to save money for my future. At that time, no one had ever talked to me about saving money for when I retire, or saving for my kids’ college funds. Sure, I knew about car and home insurances, but if you asked me about health and life insurance, my answer was, “I think my employer has those covered for me.” 

Teacher’s Have Different Retirement Plans Than Everyone Else 

I was a K-8 teacher at Los Angeles Unified School District (LAUSD) for 17 years. An insurance agent came into our school lunchroom one day almost a decade ago, and asked if anyone wanted to discuss future options. I thought he was talking about 401k, but I was wrong on so many levels. First, California teachers have a special retirement pension program called CalStrs, a 403(b) plan (tax sheltered annuity plan for public school employees and non-profits), which is similar to a 401(k) (tax sheltered annuity plan for for-profit organizations). This is necessary information to know before moving on to future financial planning. 

What Retirement Did I Sign Up For?

Secondly, the insurance salesman was at my work location to sell me a type of retirement plan (annuity) that was separate from my teacher pension plan (CalStrs 403b), but would pull out tax-free money from my paycheck every month. At the time, I had no idea my retirement plans were two separate entities. The insurance salesman set me up with an annuity in 2012, for which I am grateful, even though I had no idea what I was signing up for. It wasn’t until six years later that I even looked into that annuity.

What Do You Have Planned for Your Financial Future?

That brings me to my third reason I was wrong about my retirement planning. In 2018, a teacher friend asked me about my finances and future planning. I was a bit caught off guard because no one had ever asked me about those before, but I realized they asked a good question. “Thank you for asking, I think I signed up for something in the past, but don’t remember when or what it was,” I replied. This is where I was finally introduced to proper future financial planning, and I am going to share the things I have learned with you so that you can pass it on to your loved ones. 

What Families Should Plan for the Future?

According to Backman (2017), 79% of Americans work for employers who offer 401(k) or similar retirement plans, and only 41% participate in saving for the future. Could that other 59% who do not plan for the future be you? Since the majority of Americans are not financially planning for the future, I found it necessary to bring this information to their attention. Below is a list of planning options, definitions, and tips on what might work best for your family financial planning. 

What Type of Retirement Plans Are There?

As stated above, most Americans do not take advantage of their employer’s tax sheltered retirement plans. There are other plans available for tax sheltered retirement savings such as IRA’s and Roth IRA’s. Even I did not understand this information until a few years ago, but I have broken down the different types of retirements plans here to help you better understand which one might be the right fit for you and your family:

Employer Sponsored Profit-Sharing Retirement Accounts

  • 401(k) – tax-advantaged, defined-benefit, defined-contribution, long-term, qualified retirement savings plan offered by for-profit organizations.
  • Solo 401(k) – tax advantaged, substantial contributions, long-term, qualified retirement savings plan for self-employed, or businesses with no full-time employees. Can make contributions as employer and employee. 
  • 403(b) – tax-sheltered annuity plan, defined-contribution, long-term, qualified retirement savings plan offered by for public school employees and non-profits
  • 457(b) – tax sheltered, deferred compensation, non-qualified, supplemental plans based on contributions and investment performance, offered by state and local government agencies.
  • 457(f) – tax sheltered, deferred compensation, long-term, nonqualified, supplemental retirement plan for eligible highly compensated government employees. There are some tax-exempt non-governmental businesses that are eligible to offer this plan. 

Individual Retirement Accounts (IRAs) – available to those with earned income:

  • Traditional IRA – tax deferred, qualified retirement plan, contributions from pre or after taxed income, penalty free but taxed after 59.5 yrs of age, mandatory distributions after age of 72 (best for individuals who expect to be in similar or lower tax bracket when withdrawals start)
  • Roth IRA – tax-free, nonqualified retirement plan, contributions from after taxed income, penalty/tax free, no mandatory distributions (best for individuals who expect to be in a higher tax bracket when withdrawals start)
  • Health Savings Account (HSA) IRA – qualified retirement plan, to build funds that will pay for health costs during retirement (best for individuals who have high deductibles and consumer-choice health plans)
  • Self-directed IRA – allows funds to be placed into alternative assets
  • Savings Incentive Match Plan For Employees (SIMPLE) IRA – for small businesses with 100 or less employees 
  • Simplified Employee Pension (SEP) IRA – for small businesses with 100+ employees 

Annuities – variety of insurance contracts that are tax-advantaged, defined-benefit, defined-contribution, long-term, no annual contribution limits, can be qualified or nonqualified retirement savings plan offered by insurance organizations. Can be offered by employers as an alternative or supplemental retirement savings plan. Similar to 401k, good for those who do not have 401k as an option, also good as a supplemental retirement savings plan.

  • Fixed – specific, guaranteed, fixed interest rate
  • Indexed – interest rate based on market index (offer minimum rate combined with market rate)
  • Variable – interest rate fluctuates based on performance of investment portfolio (can choose from a variety of investments)
    • Group variable – insurance contract for businesses that offer retirement plans, an alternative plan, offered by insurance companies. 

What Should Families Know About College Planning?

  • 529 Qualified Tuition Plans (for children or grandchildren) – tax-advantaged, no annual contribution limits, no age restrictions, college savings account to encourage saving for qualified tuition, books, and other college related expenses, sponsored by state governments. 
  • Education Savings Account (ESA) (for children or grandchildren) – tax-advantaged, annual contribution limits, age restrictions, can use any investment, college savings account to encourage saving for qualified tuition, books, and other college related expenses, sponsored by state governments. 
  • Scholarships 
    • Free money for college not meant to be paid back, however, some may come with restrictions or commitments that must be fulfilled
    • Variety of financial aid awards designed to help college students
    • Many schools, colleges, churches, and nonprofit organizations will have annual scholarships families can apply for. 
  • Grants
    • Free money for college not meant to be paid back, not usually restrictions, possible obligations
    • There are a variety of ways to get grant money such as: 
      • write letters to nonprofits or large corporations
      • ask people for donations towards your higher education
      • search the internet for “free money” from local, state, and federal grants.
  • Financial Aid
    • Money for college that can be free, some can be earned through work, and some must be repaid
    • Must meet qualifications
    • Must have satisfactory academic progress
    • Offered to students and parents of students
      • College or Trade school aid programs
      • State and federal student aid programs
      • Military aid – special programs for military families 
      • Native American aid – special programs for native families 
      • International Study – both countries may offer school aid
      • Work Study – earn money for school by working part-time
      • Corps – the federal government offers aid to citizens who volunteer for corps
  • Loans 
    • Money for college meant to be paid back, usually with accrued interest
      • Private
      • Bank
      • Federal student loans
        • Subsidized
        • unsubsidized
  • What is FAFSA and Who Should Apply?
    • Free Application for Federal Student Aid (FAFSA) is what every person applying for financial aid must complete (recommend submitting before the beginning of each school year, available October the year before enrollment)
    • Determines Expected Family Contribution (EFC) to calculate financial aid qualifications
    • Can apply for any type of higher education aid
    • Must be US citizen with valid social security number or eligible noncitizen
    • Have a high school diploma or GED certificate
    • Be accepted or enrolled an eligible certificate or degree program
    • Tip: always keep your FAFSA pin available, write it down somewhere you won’t forget
    • Variety of institutions who accept financial aid:
      • Community college
      • Vocational school
      • Trade school
      • Technical school
      • College
      • University
      • Undergraduate school
      • Graduate school

What Kind of Insurance Plans Should Families Have?

  • Vehicle – for driving age family members
    • Liability – mandatory in most states
      • Bodily injury
      • Property damage
    • Uninsured/Underinsured Motorist
    • Comprehensive
    • Collision
    • Medical payments
    • Personal injury protection
    • Rental Reimbursement/transportation expenses
    • Gap 
    • New car replacement
    • Towing
    • Ride-sharing
    • Sound system
  • Home –  variety of homeowners property insurance coverages that fall into three different categories
    • Replacement cost
    • Actual cash value
    • Extended replacement costs
  • Health – variety of insurances based on health care needs and costs
    • Health Maintenance Organizations (HMOs)
    • Exclusive Provider Organizations (EPOs)
    • Point-of-Service (POS) plans
    • Preferred Provider Organizations (PPOs)
  • Life – based on stages of life
    • Term 
    • Whole 
    • Universal 
    • Variable 
    • Group 
    • Simplified issue
    • Guaranteed issue
  • Pet – offered to owners to cover emergency vet costs


There are several things to consider when thinking about what to plan for your family’s future. When you have time, sit down and review this list with your family. I have created it so that you can refer back to and use it to help you plan your future family financial plans. Next week, I will get into the “When” families should start planning for their financial future. Best of luck on your family financial planning. 

Thank you for reading,

Dr. Jaime Brainerd, Ed.D.


Backman, M. (2017, June, 19). Does the average American have a 401(k)? The answer might surprise you. The Money Fool. Retrieved from

About the Author

Dr. Brainerd

Hello, I am Dr. Jaime Brainerd Ed.D., a lifelong learner, beauty consultant, author, financial specialist, artist, traveler, health enthusiast, and self care advocate. Please follow my website for my B.R.E.A.T.H.S. blogs.

4 thoughts on “Family Financial Planning: “What Do Families Plan for their Financial Future?”

  1. What a detailed list and helpful information for financial planning. We also started a 7 year annuity for retirement that had the option to cash out or let it grow. Since we weren’t ready to retire after the 7 years we let it grow. Two years ago we decided to take an annual payment instead of lump sum and it’s quite a nice amount. The plus is when we both reach 75 years old the annual amount increases. Once my granddaughter learned about this, she is now looking into one. Never to early to start thinking of the future.

  2. wow! this is such a comprehensive list of things families need to be part of their financial planning. And you have explained each one so well too

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