Financial Planning Tips!!

Balance Sheet: Look beyond the numbers. Those change every day. Consider your balance between taxable / pre-tax / and tax-free accounts and the weight of liquid vs. illiquid assets.

Estate Documents: Share the copies once they're drafted!

Debt Repayment: Look beyond interest rates and assumed investment returns. Consider your debt repayment time horizon. When will your debts be fully paid, and how will you meet those fixed expenses over the years? Are they considered part of your emergency fund?

Investment Accounts: Do you have too many accounts? Do they need to be simplified, earmarked, or consolidated? If your accounts and list of investments don't fit on one page, you may need to be more intentional.

Don't buy multiple things doing the same thing!

Education Savings: There are multiple ways to save for education and other child savings objectives, including 529 accounts, UTMAs (I'm not a fan), and taxable brokerage accounts (in the parents' names).

Consider cash flow flexibility and objectives beyond traditional education.

Fees: Do you know how much you're paying for your investments and/or financial advisor as a dollar amount rather than a percentage? Hint: They really add up!

Fees aren't everything, but they shouldn't be neglected.

Health Savings Account (HSA): This is one of my favorite accounts since I'm covered by a high-deductible health plan (HDHP). Pre-tax deductions, tax-free growth, and tax-free distributions for qualified medical expenses - including future reimbursement!

My HSA is my long-term care funding account.

Bonds: They can provide various levels of stability, income, and diversification.

Before you buy any bonds, determine what you want them to achieve! Consider duration, interest rate risk, credit risk, and correlation to other asset categories.

Asset Allocation: Consider your total portfolio's asset allocation and then each account individually.

Your accounts don't all need to be invested exactly the same. In fact, they probably shouldn't be!

Retirement Savings: We get too caught in savings rates as a percentage (%), but I prefer to focus on dollar amounts ($).

That way, you can still achieve your financial independence objectives regardless of variable income, part-time work, etc.

How much do you need to save?

Savings Options: Each person has unique retirement savings options, often including Social Security, various workplace retirement plans, IRAs, HSAs, and taxable brokerage accounts.

Focus on what's available to YOU rather than following someone else's order of operation.

Social Security: Even if you aren't counting on it, still create an online account to verify the accuracy of your earnings history.

If you are counting on it, be conservative with your expectations by assuming a reduction in future wages - based on your highest 35 years.

Early Retirement: The 10% early withdrawal penalty isn't actually that scary, and it can be avoided!

Consider Substantially Equal Periodic Payments - SEPP 72(t), Roth conversion ladders, the 'Rule of 55,' and the underappreciated power of taxable brokerage accounts!

Taxes: Don't wait until next year to figure out this year's income taxes! In mid-November, calculate your anticipated income from all sources, tax liabilities, deductions, and withholding,

Also, don't forget the IRA and HSA deadlines of (next) April rather than (this) December!

Property & Casualty Insurance: There's a good chance your homeowners/auto/liability coverage and deductibles aren't right-sized for your financial situation.

Next time you shop for insurance, be intentional with your coverage limits, deductibles, and how you pay your premiums!

Financial Planning: Create your own financial plan each year and discuss it as a family.

You don't need to hire an advisor to be proactive with your family's comprehensive financial situation, unique values, and desired outcomes.

Start the conversation!