In the words of the late Dick Wagner, “Financial planners help their clients spend less, save more and not do anything stupid.” There are a lot of choices you have to make in life, and some can cost you in the long run if you don’t have intelligent guidance. Many people wait until they’re nearing retirement to do any planning. Statistics show that those who work with a comprehensive planner are better off in retirement than those who don’t.
Here are some life changes and “triggers” that might warrant a meeting with a financial professional:
- You’ve changed jobs.
Whether you are changing companies, starting your own business, or moving up the ladder at your current firm, there are many planning considerations to evaluate. You may have new benefits, a change in health coverage, or a new compensation structure. You may want to rollover your old 401(k) plan and evaluate how to invest it. If you are losing life insurance coverage, now may be the time to purchase some coverage outside of an employer plan.
- Your marital status has changed.
Getting married, remarried, or divorced are all major life changes that will take some time to get used to. You may need to merge or diverge your income, which could change how you manage cash flow and the goals that you are striving for. Most of the time, there is relocation involved. How much house can you afford? Should you buy or rent? How will the bills be paid going forward?
- You’ve added to your family.
Adding a child obviously has a large impact on your financial plan. Will your income change because one parent chooses to stay home or move to a less stressful career path? How will you handle the lack of income during maternity and/or paternity leave? If both parents are working, how will you adjust your cash flow to pay $25,000 in daycare expenses each year? Does the additional family member warrant a move to a larger home or a remodel to your existing home? According to CNN Money, it costs $233,610 to raise a child from birth to age 17. That is some serious dough, and does not even include college expenses! Now that someone is dependent on you for survival, having the right amount of life insurance and an estate plan become very important.
- You’re caring for an aging parent.
Many people are stuck in the difficult position of caring for an aging parent while also trying to raise their own children. A financial planner can help you understand what assistance might be available to you and how to handle this situation. Who will take care of them if something happens to you?
- You’re making good money but still living paycheck to paycheck.
Managing cash flow can be tough for people at all income levels. On one hand, you have fixed expenses that are the same every month. On the other, you have unexpected surprises and emergencies that can throw you for a loop or cause you to go into debt. A planner can help you be prepared for emergencies and help set up a cash flow management system that works for your unique situation.
- You’re just not sure if you’re doing the right things, making the right moves.
You feel like you’re in a good spot financially, but you just don’t know for sure. A planner can help give you peace of mind that you are on the right track to meet your specific goals, including:
- Large purchases – houses, vacation houses, business mergers or acquisitions, boats, etc.
- Sending kids to college – How can you maximize financial aid? When do you apply? Which expenses are allowed and which are not? Which accounts should you withdrawal money from to pay for college expenses?
- Compensation planning
- Retirement and other long-term financial goals
Financial planning is about using the resources we have along with our current and future income to build the life we want. A study published in the Journal of Financial Planning concluded that those who work with a comprehensive financial planner to calculate their retirement needs and go through the planning process generated 50 percent greater savings than those who estimated their retirement needs on their own. Stop guessing if you are doing the right things and meet with a financial professional to know for sure. Make sure you are working with a comprehensive financial planner, not just an investment manager who is selling products and not making a plan for your future. A planner can help you evaluate and navigate life’s minor and major decisions and design a roadmap to get you where you need to be. Sooner is better – more time to change course or repair any damage that has already been done. Think it’s too late to get started? The best time to start planning might have been 10 years ago, but the second best time is today.
If you have experienced one of the changes above, or just need help making the first step toward a plan, schedule a meeting by clicking below, contact Jamie Bosse –firstname.lastname@example.org, or call (913) 345-1881.