Put your financial "puzzle" together

January 29 is National Puzzle Day, with puzzle celebrations and events taking place at museums, libraries and other venues across the country. Why this date was chosen – or why National Puzzle Day even exists – is something of a mystery. But as an investor, you can find value in the concept of a puzzle – specifically, in putting together the pieces of your financial puzzle.

 What are these pieces? Here are the essential ones:

• Growth – At different times in your life, you will have various goals – purchasing a first or second home, sending your children to college, enjoying a comfortable retirement, and so on. While these goals are diverse, they all have one thing in common: To achieve them, you’ll need some growth potential in your investment portfolio. The nature and the extent of the growth-oriented vehicles, such as stocks and stock-based instruments, in your holdings will depend on your specific goals, risk tolerance and time horizon – but growth opportunities you must have.

• Income – Income-producing investments, such as bonds and dividend-paying stocks, can help supplement your earned income during your working years and provide you with a valuable income stream when you’re retired. Plus, bonds and other income-producers can help balance a portfolio that might otherwise be too heavy in growth vehicles – which, as you know, are typically higher in risk.

• Taxes – Taxes will always be part of the investment equation. Whenever possible, you’ll want to take advantage of those accounts that let you make tax-deductible contributions and that provide the opportunity for tax-deferred growth, such as a traditional IRA and your 401(k) or other employer-sponsored retirement plan. You may also find that you can benefit from tax-free investments, such as some types of municipal bonds and a Roth IRA. (Your Roth IRA contributions are not tax-deductible, but your earnings grow tax free, provided you’ve had your account at least five years and you don’t start taking withdrawals until you reach 59½.)

• Protection – You can’t just invest for your future – you also have to protect it. If something were to happen to you, would your family be able to remain in your home? Would your children still be able to go to college? To help ensure continuity and security in your family’s lives, you’ll need to maintain adequate life and disability insurance. Also, you will need to protect your independence in your retirement years, as you no doubt would want to avoid burdening your grown children with any financial burden. To attain this type of freedom, you may have to guard against the potentially catastrophic costs of long-term care, such as an extended nursing home stay. A financial professional can suggest ways of meeting these expenses.

• Legacy – After working hard your whole life, you’d probably like to leave something behind to your children, grandchildren, other family members and possibly even charitable institutions. To create the legacy you desire, you will need to create a comprehensive estate plan. Because such a plan may involve a will, living trust and other complex legal documents, you will need to work with your legal and tax advisors.

Try to put these pieces together to help complete your financial “puzzle” – when you do, you may well like the picture that emerges.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.