Financial Future

Your financial future is something you need to think about. Let’s look at how you are doing.

The Minimum:

1. Ensure that you are getting the full employer match on your 401(k);
2. Name or update the beneficiary(ies) on all your accounts;
3. Diversify your investment portfolio to match your goals and your risk tolerance;
4. Make sure you have an emergency fund;
5. Ensure that all your credit card and consumer debt is paid;
6. Pay off your student loans;
7. Prepare a will and or revocable living trust.

Moving Up:

1. Pay a little extra on your mortgage each month;
2. Learn/Improve your investing knowledge by attending a free online workshop or researching items on the web;
3. Pay off your credit cards in full each month;
4. Track your spending;
5. Cut back on expenses and add that to your savings.

Wealth Building:

1. Max out your 401(k) contributions;
2. If you are eligible, contribute to a health savings account (HSA)  or a flexible spending account (FSA);
3. Contribute to an IRA or a ROTH IRA;
4. Do not incur any debt that you cannot pay off within a month. This includes credit cards, personal loans, etc.;
5. Apply any raises to your home mortgage and savings.

Retirement Optimization

1. Do NOT retire until your mortgage is paid off, unless you are physically unable to retire or have a mandatory retirement age;
2. If you retire with a mortgage, downsize your home or get a second job and apply that wage to the mortgage;
3. When you retire, your Money Blueprint has to reflect your retirement income and expenses. Create it ahead of retirement and base it on your ideal retirement, including your location and lifestyle. If you see that your lifestyle and location won’t mesh with your retirement income, then you need to make changes. Sell the home and move to a different home and/or location;
4. Review your Social Security statement to ensure that ALL of your income information is accurate. Remember that Social Security is only meant to cover 40% of your retirement income. The remaining 60% has to come from investments;
5. You need to consider planning for long-term care (LTC). Research LTC insurance and buy one that will adjust for inflation (Automatic Inflation Protection). This coverage increases your LTC benefits each year;
6. Plan and create a tax-smart strategy for your income withdrawal from your investments.

Beyond the Basics

1. Research investment options for your HSA, if eligible;
2.  Share your investment knowledge with others;
3. Remember that you can give $15,000 annually to any individual without incurring a federal gift tax;
4. Make a tax-smart charitable gift of any appreciated assets;
5. Review your wills and/or living revocable trusts and make any needed changes;
6. Review and update beneficiary(ies) on all your accounts;
7. Prepare a plan that will guide your loved ones for when you pass. This should accessible to them. It should have your will and/or living revocable trust, information about who or what your loved ones need to do to notify your financial institutions, Social Security, retirement offices, etc.

Tell your loved ones ahead of time if you want to be cremated or buried. Inform them what you want done with your ashes. Set aside some money to cover burial/cremation costs. When people die, their loved ones are often preyed upon by those who want to make money off of them. They try to sell them a fancy casket or an expensive plot. Your corpse doesn’t need a fancy casket nor do your ashes need to housed in an expensive urn. You don’t need to be buried in a plot with a great view. If this sounds cruel, I’m sorry. Death will come to us all. It is better to be prepared and to have a plan. If you don’t want to discuss this with your family, write it in your will.