A Review of Some of Our Favorite Financial Planning Tips and Ideas
By Nicole T. Strbich, CFP®, CPWA, EA - Managing Director of Financial Planning
A Review of Some of Our Favorite Financial Planning Tips and Ideas
As we approach Fall and start thinking about year-end planning, we thought it would be a great time to revisit some of our timeless financial planning tips and ideas from our newsletters over the past few years.
Questions to Ask Yourself as You Transition into Retirement:
- Do you have a financial retirement plan in place?
- Do you know where your income in retirement will come from? What is your Social Security benefit? Have you evaluated any pension options and considerations? Do you understand your rate of distribution in retirement?
- Are your investments ready for your retirement?
- Have you prepared your portfolio for your retirement? Are your short-term funds in a position away from market volatility? Are you still in a position to capture growth with your long-term funds?
- What will you do in retirement?
- How will you spend your day? What are your hobbies and interests? How will you stay mentally and physically active?
Fraud Protection:
- Be Wary of Email Phishing:
- Look at the sender, if the email doesn’t match the name or the company – it is most likely a scam. Who the email is addressed to – If it is addressed to your email handle, it is most likely scam or “dear client”.
- Grammar and spelling – official company emails will have proper grammar and no spelling or spacing errors.
- Company logo – is the logo the correct logo of the company? Is it blurry? Is it included in the email signature? – if not, it is most likely a scam email.
- Steps to Prevent Imposter Calls:
- Register on the national do not call list.
- If you don’t know the number, don’t answer. If it was an important call, the caller will leave a voicemail message.
- Most places do not take gift cards as payments. If someone is saying you have to purchase a gift card, this is fraud.
- Only call the number on the verified website, or if you have answered a “bank/credit card call” – simply tell the “rep” before you give them any information you will call the phone number on the website back and discuss with the next rep available. If they start to get aggressive – hang up the phone immediately.
- Protect Against Check Washing:
- Take advantage of secure electronic payment methods when possible.
- If you must mail a check, try to drop it directly at the post office, or in a blue mail bin prior to the final pick up for the day. Try to avoid placing checks in your residence mailbox with the flag up.
- Use a black gel pen with non-erasable ink to write checks. These pens seep into the check’s fibers and are resistant to the common chemicals used in check washing.
- Monitor your bank accounts regularly.
Reducing Financial Stress & Strategies in Volatile Markets:
- Make sure your asset allocation is in line with your goals and risk tolerance
- When deciding how much of your portfolio should be in stocks vs. bonds, you should anticipate what your distribution needs will be in the next 5 to 7 years, what your risk tolerance is for these funds, and the goals for these funds. At any one time, you should always have at least the next 5 years of your planned distributions held in fixed income (bonds) or cash, to avoid being forced to sell stocks in a down market to raise cash for your short-term distribution needs.
- Look for opportunities
- Consider moves like harvesting tax losses in taxable accounts as a way to save losses to match up with gains later. If you are a candidate for a Roth conversion, consider completing the conversion while stock prices are lower to increase the potential value of the transaction. If you have excess cash above and beyond the amount needed for your upcoming expenses and target asset allocation, consider adding to your stock allocation.
- Keep your finances flexible
- Consider what resources and investments you have access to if you should need them. Accumulate funds in accounts where you do not have early distribution penalties or surrender fees. Make sure you have emergency savings in place that would cover 3-6 months of expenses.
- Take Advantage of Tax Planning
- Tax strategies include loss harvesting, asset location optimization, conscious rebalancing, implementing distribution strategies, and others to maximize resources up to and through retirement. Taking advantage of this planning and its benefits requires advisors that understand how each of these pieces connect. At Buckingham Advisors, our departments work together to create integrated tax strategies for our clients. Tax planning can maximize long-term rewards and reduce short-term concerns.
- Work with a Financial Planner who will Put the Pieces Together for You
- Managing all these pieces on your own can be stressful (and feel like a full-time job). Look to work with a financial planner who can consider all the pieces of your financial picture and will provide strategy and guidance to you along the way.
Estate Planning Considerations:
Your estate plan acts as a guide and specifies your wishes to loved ones if you become incapacitated or pass away. A well thought out plan can significantly reduce the time, cost and burden on loved ones when taking care of your affairs. Some of the documents are: A Last Will and Testament, Health Care Directives, Durable Financial Power of Attorney, and potentially a Trust.
Also, take these important steps:
- Add beneficiary designations to retirement accounts, insurance policies and brokerage accounts.
- You should also add Pay on Death (POD) designations on your bank accounts.
- In some states, such as Ohio, you can add Transfer on Death (TOD) designations to your residence and vehicles, which allow these assets to avoid probate.
- Once you have your plan set up, consider organizing everything in one place, like a binder. In addition to your estate documents, include a full list of your assets along with any liabilities. Having everything in one place makes it easy for you to review your plan from time to time. It also makes it easy to hand over control, if necessary, to your power of attorney upon incapacity, or your executor upon your death.
For further information on any of these topics, please reach out to your advisor or visit the resources page of our website to view past articles in their entirety. We look forward to continuing to provide you with planning ideas and strategies to help you reach your goals and objectives. Please call the office at 937-435-2742 to discuss any of these items further.