Author: Gene Gard

HELOC for College?

Post author By Gene Gard
Post date October 2, 2024

The cost of a college education has risen significantly over the last few decades. The average cost of college tuition and fees at public four-year universities has risen by 179.2 percent over the last 20 years. That’s an average annual increase of 9 percent! At the same time, financial aid has decreased at a rate of 6 percent, need-based grants are down 15 percent, and scholarship awards have declined by 24 percent.

If you’re struggling to pay for a child’s college education, you may be tempted to tap into your home’s equity with a home equity line of credit (HELOC). While using a HELOC to pay for college offers some benefits, including the potential for lower interest rates compared to student loans, there are also significant risks. Below are seven reasons to think twice before taking out a HELOC to pay for college.

1. Variable interest rates

Most HELOCs have adjustable interest rates, so the rate you’re paying now may not be the rate you pay in the future. If interest rates rise in the future, your monthly payment could increase significantly. This makes it difficult to plan — and virtually impossible to estimate how much you’ll pay in interest over time.

2. Risk of foreclosure

When you use your home as collateral, you risk foreclosure if you can’t fulfill your debt obligations. If an unexpected financial emergency arises and you’re not able to make payments on your loan, you could lose your home. Before committing to a HELOC, make sure you fully understand the risks and have enough emergency savings elsewhere to protect your home should something unexpected occur.

3. Minimum monthly interest payments

There are two primary time frames associated with a HELOC — a draw period and a repayment period. The draw period refers to the amount of time you have to borrow funds and is typically between five and 10 years. During this period, you don’t need to make principal payments, but you’re responsible for paying interest on your loan.

The repayment period is the time frame during which you must make monthly payments to both principal and interest. As noted above, the monthly payment amount will likely fluctuate, based on variable interest rates. Repayment periods typically vary between 20 and 30 years.

Remember that you’re paying interest throughout the entire life of the loan, during both the draw and repayment periods. The interest can add up to a significant sum over time.

4. Equity becomes unavailable for other purposes

Your home’s equity is a valuable asset. You can use it to purchase a new home, cover the cost of end-of-life care such as a nursing home, or pass it along to your heirs after your death as a financial legacy. Tapping into your home’s equity to pay for college means those assets aren’t available for other purposes, which can put your other future financial commitments at risk.

5. Prepayment penalties

Many lenders charge a penalty for paying back a HELOC faster than your established repayment terms. That’s because paying off your loan early means the lender receives less in interest over time. Before committing to a HELOC, make sure you fully understand all associated fees and potential penalties.

6. Closing costs

HELOCs often carry closing costs, which can quickly add up. Again, it’s important to fully understand all potential fees to determine whether a HELOC makes sense for your particular situation.

7. Ineligible for tax deductions

When used to pay for home improvements, the interest paid on a HELOC is typically tax-deductible. However, it’s important to know that using the money to pay for college doesn’t result in a tax deduction. In contrast, saving in a state 529 plan could both reduce your state income tax at the time of your contribution and offer tax-exempt investment growth.

Gene Gard, CFA, CFP, CFT-I, is a Partner and Private Wealth Manager with Creative Planning. Creative Planning is one of the nation’s largest Registered Investment Advisory firms providing comprehensive wealth management services to ensure all elements of a client’s financial life are working together, including investments, taxes, estate planning, and risk management. For more information or to request a free, no-obligation consultation, visit CreativePlanning.com.

Tags college, Finance, HELOC, home equity line of credit, Memphis

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Estate Planning Myths

Post author By Gene Gard
Post date September 25, 2024

Combine planning for your eventual demise with engaging in a complex legal and financial planning process, and it’s no wonder why many people shy away from estate planning. Misconceptions surrounding the estate planning process can make it seem even more daunting.

However, estate planning is essential to ensure your loved ones’ long-term financial security. Stay informed about various strategies and the role they play in protecting your heirs.

Myth #1 — Estate planning is for the wealthy.

Many people think that if their assets are less than the lifetime estate tax exemption amount ($13.61 million per individual or $27.22 million per married couple in 2024), they don’t need to worry about estate planning.

Fact: Everyone over the age of 18 should engage in estate planning, regardless of assets. While a well-executed estate plan can help lower estate tax liabilities, it also provides the following benefits:

• Helping ensure healthcare decisions are carried out according to your wishes

• Authorizing a trusted individual to manage your finances should you become unable to do so

• Providing financial security for your loved ones should you pass away unexpectedly

• Naming a guardian for minor children

• Helping ensure minor children who inherit assets have a structured plan to make sure they’re financially mature enough to receive and use assets

Note that, unless Congress makes a change, the current lifetime estate tax exemption amount will revert to approximately $5 million per individual ($10 million per married couple) on January 1, 2026. That means many more families will be subject to estate tax going forward.

Myth #2 — Estate planning is for the elderly.

Fact: Estate planning should begin at age 18, when an individual becomes legally recognized as an adult.

If you experience an accident or injury at any age and don’t have the necessary estate planning documents in place, your family members may be unable to obtain medical information, visit you in the hospital, or help manage your finances.

All adults should have: a HIPAA waiver, healthcare power of attorney, living will/advanced medical directive, financial power of attorney, and a basic will. A trust may also be advisable.

Myth #3 — Estate planning is expensive.

Fact: Complex estate planning strategies can add up, but the expense is typically well worth the stress and tax liabilities your family would face without an estate plan.

In certain situations, the cost tends to be relatively low. Some simple documents are even available online for a low fee. Be sure to check in with your wealth manager to ensure your estate planning documents are in line with your overall financial plan.

Myth #4 — If I have a will then my assets will avoid probate.

Fact: A will is a great first step in developing your estate plan but a will alone doesn’t protect your loved ones from the probate process. Probate is the only way an executor designated in your will can take action. Probate proceedings are a matter of public record, which means anyone can find out who’s inheriting your assets and how much they stand to receive.

Myth #5 — My assets will automatically pass to my heirs without an estate plan in place.

Fact: If you die without a will or trust, intestacy rules will dictate who handles your financial affairs and who receives your assets. These aren’t necessarily the people you would have chosen. Also, there are significant time, expense and administrative requirements associated with dying intestate.

Myth #6 — I created a will years ago, so I’m all set.

Fact: Estate planning should be an ongoing process, not a one-time event. Your life, family and goals are constantly evolving, and your estate plan needs to keep up with your changing needs.

Gene Gard, CFA, CFP, CFT-I, is a Partner and Private Wealth Manager with Creative Planning. Creative Planning is one of the nation’s largest Registered Investment Advisory firms providing comprehensive wealth management services to ensure all elements of a client’s financial life are working together, including investments, taxes, estate planning and risk management. For more information or to request a free, no-obligation consultation, visit CreativePlanning.com.

Tags Early Estate Planning, estate planning, estate planning myths

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Missing Retirement Funds?

Post author By Gene Gard
Post date September 18, 2024

Losing track of retirement funds is a common and concerning trend that has worsened in recent years. As of May 2023, there were approximately 29.2 million forgotten 401(k) accounts in the United States that held approximately $1.65 trillion in assets. And, due to recent increases in job switching, the number of forgotten 401(k)s has grown by more than 20 percent since May 2021.

Missing out on these retirement funds can put your retirement at risk, as you may end up losing significant assets. Fortunately, there are ways to locate and reclaim lost retirement accounts. The following tips can help.

1. Check with past employers.

If you’ve changed jobs throughout your career, it’s important to follow up with past employers to make sure you didn’t leave any money behind. Retirement plan administrators have several options for how to handle abandoned funds in an employer-sponsored account, based on the amount left in it.

• $1,000 or less — The employer can issue a check and mail it to your last known address. If you’ve moved since leaving a job, you may need to request a new check.

• Between $1,000 and $5,000 — Employers can move funds to an IRA without your consent. You’ll need to ask your past employer how to access the account.

• More than $5,000 — There’s a good chance your funds are still in the employer’s plan. It may be wise to roll over the account balance to an IRA that you control.

2. Search unclaimed property databases.

Sometimes people lose track of their retirement savings when they move and forget to notify past employers of their new address. When an employer or financial institution is unable to reach an account-holder, it may turn over the account to the state’s unclaimed property office.

Fortunately, you can search for your name on the National Association of Unclaimed Property Administrators (NAUPA) website or your state-specific unclaimed property office to find any unclaimed retirement funds that may be waiting for you.

2. Check the Department of Labor (DOL) abandoned plan database.

If your past employer’s plan was terminated, the DOL’s Employee Benefits Security Administration consolidates information about unclaimed retirement benefits and makes it easy to track down missing funds.

3. Contact the Pension Benefit Guaranty Corporation (PBGC).

The PBGC can be a great resource if you lost track of a defined benefit pension plan at a previous employer. This organization is a government agency that insures the value of pension benefits and helps individuals locate lost pension plans. Visit pbgc.gov for more information.

4. Track down forgotten IRAs.

If you think you may have abandoned an IRA along the way, take inventory of past bank and investment account statements for any evidence of the account. You can also reach out directly to any financial institutions you’ve worked with in the past to inquire about any inactive or dormant IRAs associated with your name.

If you think you left behind retirement assets at some point, it may be worth the effort of tracking them down. Even if you haven’t contributed to the accounts in many years, the power of compounding has the potential to significantly grow your retirement assets over time.

Gene Gard, CFA, CFP, CFT-I, is a Partner and Private Wealth Manager with Creative Planning. Creative Planning is one of the nation’s largest Registered Investment Advisory firms providing comprehensive wealth management services to ensure all elements of a client’s financial life are working together, including investments, taxes, estate planning, and risk management. For more information or to request a free, no-obligation consultation, visit CreativePlanning.com.

Tags 401(k), Finance, IRA, retirement, retirement savings, unclaimed property databases

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Funding Your 401(k)

Post author By Gene Gard
Post date September 4, 2024

If you’re making regular contributions to an employer-sponsored retirement plan, such as a 401(k) or 403(b), congratulations! You’re taking steps toward a more secure financial future. However, even those who participate in a 401(k) plan may worry they’re not contributing enough to achieve their retirement goals.

Unfortunately, as with so many financial planning challenges, there’s no single guideline to ensure you’re putting enough aside. Even if you have an idea of the dollar amount you’ll need to comfortably retire, the amount you need to save varies based on a wide range of factors, including when you start investing, your portfolio allocation, market events, lifestyle goals, spending habits, inflation, etc.

A general rule of thumb is to invest 15 percent of your income in a retirement account, but your exact savings requirements may differ widely from that number. Rather than focusing on a specific percentage, consider implementing the following tips to help maximize your employer-sponsored retirement plan benefits.

1. Start contributing early.

Thanks to the power of compound interest, it’s typically more advantageous to start contributing to a 401(k) as early as possible, even if you’re only able to commit to a small amount.

2. Maximize your employer match.

If someone offered to give you $3,000 each year with no strings attached, would you take it? Of course you would! Yet many people pass up retirement savings opportunities by not contributing enough to their 401(k) to receive the full value of their employer’s matching contribution. That’s essentially saying no to “free” money.

3. Increase your contributions by 1 to 2 percent each year.

Once you’re contributing enough to receive your full employer match, consider increasing your contributions each year or whenever you receive a raise. Even a 1 to 2 percent annual increase can have a big impact on your savings over time, and you’re unlikely to even notice the impact on your take-home pay.

4. Diversify your contribution types.

Many employer-sponsored retirement plans offer the option of contributing to a traditional (pre-tax) 401(k) or a Roth (after-tax) 401(k).

• Traditional 401(k) contributions provide the benefit of lowering your taxable income during the year in which they’re made. However, these assets and their earnings are taxed as ordinary income when you withdraw them in retirement.

Once you are retired and reach a certain age, the IRS requires you begin taking required minimum distributions (RMDs) from your pre-tax retirement accounts. These withdrawals are subject to ordinary income tax.

• Roth 401(k) contributions don’t provide an immediate tax benefit, but assets can be withdrawn without federal income tax as long as you’ve reached age 59.5 and held the account for at least five years.

In addition, Roth 401(k) contributions aren’t subject to RMDs, which means your assets can continue growing within the account throughout retirement.

Contributing a portion of your retirement savings to both types of accounts offers a combination of tax benefits, including:

• An opportunity to lower your current taxable income when you’re in a high tax bracket by making pre-tax contributions

• Flexibility and tax-planning opportunities in retirement that allow you to draw from accounts with different tax treatments, based on your changing needs, market conditions, and tax exposure.

Gene Gard, CFA, CFP, CFT-I, is a Partner and Private Wealth Manager with Creative Planning. Creative Planning is one of the nation’s largest Registered Investment Advisory firms providing comprehensive wealth management services to ensure all elements of a client’s financial life are working together. For more information or to request a free, no-obligation consultation, visit CreativePlanning.com.

Tags 401(k), 403(b), Finance, Memphis, retirement, Roth

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Five Habits of Successful Retirement Savers

Post author By Gene Gard
Post date August 21, 2024
No Comments on Five Habits of Successful Retirement Savers

Be a successful saver. (Photo: Annie Spratt | Unsplash)

A recent report indicated that a mere 46 percent of American households have savings in a retirement account. Of those who have saved, 6 percent reported having more than $100,000 in retirement savings, and only 9 percent have more than $500,000, indicating a significant retirement savings gap between the amount they say they need for retirement and the actual amount saved for many Americans.

The good news is that successful retirement savers can teach us a lot about how to set aside money for the future. The following habits of successful savers can help you bridge the retirement savings gap.

1. They start saving early in life.

Successful retirement savers understand the importance of saving early and consistently throughout life. This practice allows them to maximize the benefits of compound interest over time because as investment gains accumulate, they increase an account’s balance and begin earning their own interest. Over the years, this cycle can lead to significant earnings.

2. They gradually increase the amount they save.

Successful retirement savers understand that gradually increasing the amount they save over time can have a significant impact on their assets, with a minimal impact on their current lifestyle. These savers often make an effort to increase the amount they contribute to their retirement accounts by 1 percent to 2 percent each year. Over time, small, regular increases such as these can have a big impact on your retirement savings, and you’re unlikely to even notice the difference in your net income.

3. They prioritize saving for the future.

Saving for the future requires focus and dedication. Successful savers often prioritize saving over paying for nonessential expenses. A great way to prioritize saving is by incorporating it as a line item on your budget. Just as you need to pay the electric bill each month, so should you save for the future.

4. They remain focused on the long term.

Successful retirement savers understand the importance of taking a long-term approach, both with their investment allocation and their savings behavior. For example, they tend to establish a long-term investment allocation and stick with it rather than trying to time the market.

In addition, successful savers typically avoid behaviors that could derail their savings goals, such as taking 401(k) loans or withdrawals before retirement.

5. They save in multiple accounts.

Successful savers often save in multiple accounts. For example, you may wish to start by saving enough in an emergency fund to cover three to six months of unexpected expenses. At the same time, be sure to contribute to your workplace retirement account. If you have additional funds available, make regular contributions to an IRA and a health savings account (HSA). Regularly contributing to multiple accounts can help maximize your savings over time.

Tags Finance, Memphis, retirement, retirement savings

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Long-term Care Insurance

Post author By Gene Gard
Post date August 7, 2024

What are your long-term healthcare goals? (Photo: Dominik Lange | Unsplash)

There is often debate among financial professionals about whether long-term care insurance (LTCI) is worth the expense. Some advisors argue having long-term care coverage in place is vital to protecting clients’ assets in retirement. Others believe it’s more cost effective to invest the money a client would have used on premiums into a diversified portfolio that can continue growing over time to cover future care expenses. The correct answer is “it depends.” When determining whether long-term care insurance is right for you, consider the following.

What are your goals?

• Do you hope to leave a financial legacy for your children or grandchildren after you pass away? If yes, an LTCI policy may help protect the assets in your estate. If no, your current assets may be enough to cover the cost of long-term care.

• Do you hope to continue living in your home for the rest of your life, or do you wish to move to a senior living community? If you want to continue living in your own home, you may need LTCI to cover the cost of an in-home caregiver. If you plan to move to a senior living facility, the assets from the sale of your home may be enough to cover your housing and care expenses.

• Do you have children or other family members who would take care of you should you become unable to take care of yourself, or would you prefer having a professional help with your daily living tasks?

What is your current financial situation?

Perhaps this question should be, “Do you have enough assets to cover the cost of long-term care without a policy in place?” Healthcare is one of the largest expenses faced by Americans in retirement. A 2021 study by Fidelity estimated the average retired couple, aged 65, would need approximately $300,000 in after-tax savings to cover healthcare expenses in retirement. And, according to the U.S. Department of Health and Human Services, 70 percent of adults who reach age 65 will require some type of long-term care as they grow older.

If you have enough available savings to use for long-term care expenses without derailing your other financial goals, an LTCI policy may not be necessary. On the other hand, if you or your loved ones would struggle to pay such a large expense, it might make sense to invest in LTCI.

How old are you?

One of the most important considerations in determining whether or not LTCI makes sense is the age at which you purchase it. If you wait too long to implement coverage, you may not qualify. On the flip side, if you implement a policy too early, you may end up making premium payments for longer than necessary.

Tags Finance, Long-term Care Insurance, LTCI, retirement

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Where to Retire?

Post author By Gene Gard
Post date July 24, 2024

One of the greatest freedoms of retirement is the ability to live wherever you want. But your choice can have a big impact on your lifestyle and budget, so it’s important to choose wisely. Here are six considerations as you decide on a locale.

1. Cost of living

The amount you pay for daily living expenses can vary between different cities and states. By choosing a location with a more affordable cost of living, you may be able to do more in retirement, such as travel, pursue hobbies, and purchase a nicer home. Be sure to consider expenses beyond just housing, utilities, and transportation. You’ll also want to consider food and groceries, entertainment, and recreational activities.

2. Healthcare availability

During early retirement years, you may not need to worry much about healthcare. However, as you age, it may become more likely that you need access to quality healthcare and, potentially, long-term care. Consider the quality and availability of healthcare and evaluate the availability of good doctors, hospitals, senior living facilities, and long-term care facilities.

3. Taxes

The amount you pay in taxes can have a big impact on the lifestyle you’re able to afford, which is why it’s important to consider how much of your retirement income may go toward paying Uncle Sam. Evaluate the impact of the following taxes as you consider your retirement location:

• State income taxes: Different states impose different tax rates on retirement income.

• State tax on Social Security benefits: There are nine states that tax Social Security benefits (Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont). Regardless of where you live, up to 85 percent of your Social Security income may be subject to federal income tax.

• Taxes on retirement plan distributions: Assets held in tax-deferred accounts, such as traditional IRAs and 401(k)s, are subject to federal ordinary income taxes when withdrawn in retirement. However, some states don’t tax these distributions, which can help lower your tax exposure.

• Pension income: Some states differentiate between public and private pensions and may tax only public pensions. Other states tax both, and some states tax neither. Again, the amount of state tax you pay on this retirement income source can have a big impact on your lifestyle.

• Capital gains: Long-term capital gains are subject to more-favorable federal tax rates than ordinary income. However, many states don’t differentiate between earned income and capital gains, which means, depending on where you live, you may face significant tax liabilities on your investment income.

• Estate taxes: In 2024, the federal government allows individuals to pass on up to $13.61 million without any federal estate tax ($27.22 million for married couples filing jointly). However, depending on where you live, your estate may be subject to state taxes.

• Property taxes: Property tax rates vary significantly from state to state, and even between counties. Depending on which state you live in, you may be eligible for a property tax exemption (which can add up to big savings over time).

4. Leisure activities

How do you envision spending your free time once you retire? If you’re an avid golfer, it’s probably important to live in a location with ample golf courses and a moderate climate. If you hope to hit the slopes on a regular basis, mountains and snow are likely essential. While finding an affordable location is important, it’s just as vital that it meets your lifestyle needs.

5. Climate

If you’ve ever felt the impact of seasonal affective disorder, you know how big an impact a location’s climate can have on your mental health. Once you’re retired, you may have fewer responsibilities to occupy your time, which can give you more freedom to enjoy the outdoors. Be sure to choose a location with a climate you enjoy.

6. Family and friends

Some retirees choose to move closer to their kids and grandkids, while others prefer the social aspects of an active adult community. Choosing a location with an adequate amount of social interaction can help you avoid loneliness and isolation in your retirement years.

Gene Gard, CFA, CFP, CFT-I, is a Partner and Private Wealth Manager with Creative Planning. Creative Planning is one of the nation’s largest Registered Investment Advisory firms providing comprehensive wealth management services to ensure all elements of a client’s financial life are working together. For more information or to request a free, no-obligation consultation, visit CreativePlanning.com.

Tags Finance, retirement, retirement locale, retirement plan

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Early Estate Planning

You may not feel like your child is fully grown when he or she leaves for college, but at age 18, your student is considered a legal adult. This means that, unless you complete some estate planning steps, you’ll no longer have the legal authority to remain informed about his or her medical records or financial assets.

Why does this matter? Consider the following situation.

Your 18-year-old daughter, attending college out of state, is involved in a car accident. Her roommate calls you to let you know she’s in the hospital. You frantically call the hospital, asking for an update on her medical condition. Instead of reassuring you that she only suffered minor injuries, the hospital worker states they unfortunately cannot release any confidential medical information. You ask if you can make the drive to visit her and are told you’ll be turned away upon arrival at the hospital.

You also learn that if your daughter becomes incapacitated for a period of time, you won’t have access to her financial accounts to pay any of her living expenses, such as rent or utility bills.

Without certain legal documents in place, you’ll likely need to petition the court for the right to manage your daughter’s medical care and handle her financial matters. This situation only adds to the anxiety and frustration of an already stressful circumstance.

Fortunately, an estate planning attorney can help you draft several documents that can prevent you from experiencing such a scenario. Three essential documents are as follows:

• HIPAA waiver — According to the provisions of the Health Insurance Portability and Accountability Act of 1996, hospital and healthcare providers can’t legally disclose an individual’s medical information to others without the patient’s consent. By signing a HIPAA waiver, your child can ensure you have access to his or her medical information in the event of an emergency.

• Advanced medical directive — This document functions as a healthcare power of attorney, allowing you to make medical decisions for your child should he or she become incapacitated. This document also typically includes a living will, which specifies how your child would like you to handle end-of-life decisions.

• Financial power of attorney — A financial power of attorney allows your child to designate you as an agent to manage his or her financial assets. With this document in place, you’ll be able to manage your child’s finances, including paying bills and filing taxes on their behalf.

In addition to the three essential documents noted above, you may also want to consider executing the following:

• Financial Educational Rights and Privacy Act (FERPA) waiver — This allows you to have access to your child’s education records, such as transcripts, class schedules, etc.

• Last will and testament — While college students typically have few assets (no home or car in their name, etc.), your child may want to designate who would receive important items, such as jewelry, collectibles, or pets, if they were to pass away. It can make sense to execute a will at the same time as the documents above so that your family is better prepared once your child graduates from college.

Tags Early Estate Planning, Finance

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Personal Financial Planning

Post author By Gene Gard
Post date June 26, 2024

Plant seeds for success. (Photo: Micheile Henderson | Unsplash)

Most people realize the importance of saving and investing for the future, but only 32 percent of Americans have a written financial plan in place to help them prioritize their goals and track their progress.

If you’ve been putting off establishing a financial plan, you may want to reconsider. Following are five ways a comprehensive financial plan can help improve your financial outlook.

1. A financial plan serves as a map to guide you toward achieving your financial goals.

One of the benefits of creating a personal financial plan is that it identifies and prioritizes your goals and objectives. Achieving major goals such as planning for retirement, paying for a child’s college education, making a large purchase, paying down debt, etc. requires focus and determination. A financial plan can guide your decision-making and coordinate the various elements of your financial life to help ensure they’re working together toward achieving your goals.

2. A financial plan can help you feel more confident about your future.

A study conducted by Charles Schwab indicated that 54 percent of people with a financial plan feel confident they’ll be able to reach their financial goals, yet only 18 percent of those without a plan have the same level of confidence.

Creating a comprehensive financial plan to guide your decision-making can be a big step toward helping you feel more confident and in control of your financial future.

3. A financial plan can assist in protecting your family and managing your risk.

A comprehensive financial plan not only helps you build wealth but can also help you protect it. If not properly planned for, risks such as a medical emergency, an accident, a lawsuit, or a natural disaster can quickly jeopardize everything you’ve worked so hard to accomplish.

A thorough and well-designed financial plan will include personalized insurance and asset protection strategies to help protect your wealth and loved ones from unexpected risks.

4. A financial plan can guide your investment strategy.

Without a financial plan in place, it can be difficult to determine whether your investment strategy meets your ever-evolving needs and goals. Instead, a well-crafted plan recognizes that your investments play a crucial role in supporting you as you navigate the different stages of your financial life.

By having a financial plan in place, you can implement long-term investment strategies that allow you to take advantage of opportunities during periods of volatility while also protecting your assets against loss during market downturns.

5. A financial plan can assist you in leaving a financial legacy.

If your goals include leaving a financial legacy for the people and causes that matter most to you, it’s important to have a proper plan in place. Incorporating estate planning as part of your overall financial strategy can help ensure your assets are distributed according to your wishes and in the most tax-efficient manner possible.

Your financial plan can also help you identify opportunities to support charitable causes both during your lifetime and after your death, such as through a donor-advised fund or charitable trust.

Tags Finance, Personal Financial Planning

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Relax This Summer

Post author By Gene Gard
Post date June 12, 2024

Summer is a time of afternoons by the pool, barbecues, and relaxation. It’s a chance to take a break from your usual routine and enjoy outdoor hobbies and time with loved ones. As important as it is to enjoy summer while you can, it’s equally important to stay financially focused and not lose sight of your financial goals. The following tips can help you remain financially on track throughout the summer months.

1. Automate your finances.

Need a break from constantly managing your finances? Give yourself some time to kick back and relax this summer by automating your accounts and investments. Here are a few ways to add automation to your financial routine so you can spend more time poolside.

• Set up automatic debits with your credit card company, loan servicer, utility companies, etc. This practice removes the stress of having to schedule payments each month. Just make it a point to regularly check in on your accounts and ensure the correct amounts have been debited.

• Set up bill pay with your bank. For any service providers that don’t offer automatic debits, consider setting up direct payments through your checking or savings account. It’s still easier than mailing a check each month.

• Automate your retirement plan contributions through payroll deferrals.

• Establish a direct transfer from your paycheck to your savings account.

2. Review your beneficiaries.

Checking this important task off your list can provide you with peace of mind this summer. Beneficiaries can quickly become outdated as your life evolves and your relationships change over time. That’s why it’s important to periodically review your beneficiaries on all accounts, investments, trusts, and other estate planning documents. Also, make sure the custodians you’ve designated to care for your children are still the people you wish to name and that your successor trustee remains relevant.

3. Rebalance your portfolio.

Use the change in seasons as a reminder to review your asset allocation and rebalance if necessary. Rebalancing to your original (or an updated) asset allocation helps lock in gains from top-performing sectors and ensure your portfolio remains in line with your investment objectives and risk tolerance. Contact your wealth manager for assistance.

4. Check in on your insurance.

Want to feel extra carefree this summer? Review your insurance policies to ensure you’re covered should something unexpected happen. Your wealth manager can help review your existing insurance policies and identify any gaps in coverage.

5. Plan for summer expenses.

Don’t let summertime expenses catch you off guard. Make a plan to cover the added costs of summer vacations, kids’ camps, childcare expenses for when the kids are out of school, etc. Having a plan in place allows you to comfortably spend a bit more without negatively impacting your other financial goals. If you have a dependent care FSA, this can be used to pay for summer day camps (in addition to daycare and preschool) in a pre-tax manner, assuming the expenses are allowing you to be gainfully employed or look for work.

6. Take steps to lower your taxes.

The midyear point is a great time to check in on your tax planning strategies. Your wealth manager can help you take advantage of tax-loss harvesting, asset location, charitable giving, and other strategies to help lower your annual tax liabilities.

Tags Finance, summer