Financial Mistakes to Avoid During Divorce (Part 1)

Financial Mistakes to Avoid During Divorce (Part 1)

Divorce can be devastating, but with careful planning and avoiding these all-too-common mistakes, you can help save your client from financial mistakes that could affect them for the rest of their lives.

New Tax Law May Undermine Prenups

New Tax Law May Undermine Prenups

As a regular part of your family law practice, you may have created or reviewed many prenuptial agreements in the past. They have been filed away by your former client never to be looked at again unless a “situation” arises. However, in light of the new tax law, these contracts should probably be pulled out and reviewed.

DOL Fiduciary Rule is Dead.

DOL Fiduciary Rule is Dead.

In a 2-1 decision on June 21st, the Fifth Circuit Court of Appeals sided with a group of financial industry plaintiffs to effectively put an end to the Department of Labor's fiduciary rule, which would require all financial advisors to act in clients' best interests with regard to retirement accounts.

Managing Student Loan Debt

Managing Student Loan Debt

No one wants to carry five figures of education debt into middle age or retirement, but some do. The burden is not just financial. Last fall, the Madison Capital Times asked student loan borrowers in the state of Wisconsin how they felt about their education debt. Sixteen percent said they were “terrified” of it, and another 30% indicated they felt only slightly less so. Fortunately, you may have possibilities to manage and reduce the debt load and the anxiety it breeds.

Managing Money Well as a Couple

managing-money-couple.jpg

What are the keys in planning to grow wealthy together?

Provided by Angel McCall CFP®

When you marry or simply share a household with someone, your financial life changes – and your approach to managing your money may change as well. To succeed as a couple, you may also have to succeed financially. The good news is that is usually not so difficult.

At some point, you will have to ask yourselves some money questions – questions that pertain not only to your shared finances, but also to your individual finances. Waiting too long to ask (or answer) those questions might carry an emotional price. In the 2017 TD Bank Love & Money survey consumers who said they were in relationships, 68% of couples who described themselves as “unhappy” indicated that they did not have a monthly conversation about money.1

First off, how will you make your money grow?

Simply saving money will help you build an emergency fund, but unless you save an extraordinary amount of cash, your uninvested savings will not fund your retirement. Should you hold any joint investment accounts or some jointly titled assets? One of you may like to assume more risk than the other; spouses often have different individual investment preferences.

How you invest, together or separately, is less important than your commitment to investing. Some couples focus only on avoiding financial risk – to them, maintaining the status quo and not losing any money equals financial success. They could be setting themselves up for financial failure decades from now by rejecting investing and retirement planning.

An ongoing relationship with a financial professional may enhance your knowledge of the ways in which you could build your wealth and arrange to retire confidently.

How much will you spend & save?

Budgeting can help you arrive at your answer. A simple budget, an elaborate budget, or any attempt at a budget can prove more informative than none at all.

A thorough, line-item budget may seem a little over the top, but what you learn from it may be truly eye opening.

How often will you check up on your financial progress?

When finances affect two people rather than one, credit card statements and bank balances become more important, so do IRA balances, insurance premiums, and investment account yields. Looking in on these details once a month (or at least once a quarter) can keep you both informed, so that neither one of you have misconceptions about household finances or assets. Arguments can start when money misunderstandings are upended by reality.

What degree of independence do you want to maintain?

Do you want to have separate bank accounts? Separate “fun money” accounts? To what extent do you want to comingle your money? Some spouses need individual financial “space” of their own. There is nothing wrong with this, unless a spouse uses such “space” to hide secrets that will eventually shock the other.     

Can you be businesslike about your finances?

Spouses who are inattentive or nonchalant about financial matters may encounter more financial trouble than they anticipate. So, watch where your money goes, and think about ways to repeatedly pay yourselves first rather than your creditors. Set shared short-term, medium-term, and long-term objectives, and strive to attain them.   

Communication is key to all this.

In the TD Bank survey, 78% of the respondents indicated they were comfortable talking about money with their partner, and 90% of couples describing themselves as “happy” claimed that a money talk happened once a month. Planning your progress together may well have benefits beyond the financial, so a regular conversation should be a goal.1 

Click here to download a pdf of this article.


This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 - newscenter.td.com/us/en/campaigns/love-and-money [1/2/18]

Combining Finances When You Marry

bride-dress-hands-35981.jpg

How separate (or intertwined) should your financial lives be?

Provided by Angel McCall CFP®

 

Some spouses share everything with each other – including the smallest details of their personal finances. Other spouses decide to keep some individual financial decisions and details to themselves, and their relationships are just fine. 

Just as a marriage requires understanding, respect, and compromise, so does the financial life of a married couple. If you are marrying soon or have just married, you may be surprised (and encouraged) by the way your individual finances may and may not need to change.

If you are like most single people, you have two or three bank accounts.

Besides your savings account and your checking account, you may also have a “dream account” where you park your travel money or your future down payment on a home. You can retain all three after you marry, of course – but when it comes to your expenses, you have a fundamental decision to make.

After you marry, the two of you may also find it best to have three checking accounts.

A joint account can be set up specifically for household expenses, with each spouse retaining an individual checking account. Of course, each spouse might also maintain an individual savings account.

Do you want to have a joint bank account? The optimal move is to create it as soon as you marry. Some newlyweds find they need a joint bank account only after some financial trial and error; they may have been better off starting out married life with one.

If you only have individual checking accounts, that forces some decisions.

Who pays what bill? Should one of you pay most of the bills? If you have a shared dream (like buying a home), how will you each save for it? How will you finance or pay for major purchases?

 

It is certainly possible to answer these money questions without going out and creating a joint account. Some marrying couples never create one – they already have a bunch of accounts, so why add another? There can be a downside, though, to not wedding your finances together in some fashion.

Privacy is good, but secrecy can be an issue.

Over time, that is what plagues some married couples. Even when one spouse’s savings or investments are individually held, effects from that individual’s finances may spill into the whole of the household finances. Spouses who have poor borrowing or spending habits, a sudden major debt issue, or an entirely secret bank account may be positioning themselves for a money argument. The financial impact of these matters may affect both spouses, not just one.

A recent TD Ameritrade survey found that 38% of those questioned had little or no information about the debts their partner may hold. In another survey by Fidelity, 43% of respondents indicated that they had no idea what salary their partner brings home. This is hard to reconcile with the same Fidelity survey indicating that 72% of couples say that they are excellent communicators. Still, an effort to live up to that impression is a step in the right direction; more communication may help put both partners on the same page.1

So, above all, talk.

Talk to each other about how you want to handle the bills and other recurring expenses. Discuss how you want to save for a dream. Chat about the way you want to invest and the amount of risk and debt you think you can tolerate. Combine your finances to the degree you see fit, while keeping the lines of communication ever open.

Click here to download a PDF of this article.


This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 - time.com/money/4776640/money-tips-married-couples/ [6/1/17]

Comprehensive Financial Planning: What it is, Why it Matters

comprehensive-financial-planning.jpg

Your approach to building wealth
should be built around your goals & values.

Provided by Angel McCall CFP®


Just what is comprehensive financial planning?

As you invest and save for retirement, you may hear or read about it – but what does that phrase really mean? Just what does comprehensive financial planning entail, and why do knowledgeable investors request this kind of approach?

While the phrase may seem ambiguous to some, it can be simply defined.

Comprehensive financial planning is about building wealth through a process, not a product.

Financial products are everywhere, and simply putting money into an investment is not a gateway to getting rich, nor a solution to your financial issues.

Comprehensive financial planning is holistic.

It is about more than “money.” A comprehensive financial plan is not only built around your goals, but also around your core values. What matters most to you in life? How does your wealth relate to that? What should your wealth help you accomplish? What could it accomplish for others?

Comprehensive financial planning considers the entirety of your financial life.

Your assets, your liabilities, your taxes, your income, your business – these aspects of your financial life are never isolated from each other. Occasionally or frequently, they interrelate. Comprehensive financial planning recognizes this interrelation and takes a systematic, integrated approach toward improving your financial situation.

Comprehensive financial planning is long range.

It presents a strategy for the accumulation, maintenance, and eventual distribution of your wealth, in a written plan to be implemented and fine-tuned over time.

What makes this kind of planning so necessary?

If you aim to build and preserve wealth, you must play “defense” as well as “offense.” Too many people see building wealth only in terms of investing – you invest, you “make money,” and that is how you become rich.

That is only a small part of the story. The rich carefully plan to minimize their taxes and debts as well as adjust their wealth accumulation and wealth preservation tactics in accordance with their personal risk tolerance and changing market climates.

Basing decisions on a plan prevents destructive behaviors when markets turn unstable.

Quick decision-making may lead investors to buy high and sell low – and overall, investors lose ground by buying and selling too actively. Openfolio, a website which lets tens of thousands of investors compare the performance of their portfolios against portfolios of other investors, found that its average investor earned 5% in 2016. In contrast, the total return of the S&P 500 was nearly 12%. Why the difference? As CNBC noted, most of it could be chalked up to poor market timing and faulty stock picking. A comprehensive financial plan – and its long-range vision – helps to discourage this sort of behavior. At the same time, the plan – and the financial professional(s) who helped create it – can encourage the investor to stay the course.1

A comprehensive financial plan is a collaboration & results in an ongoing relationship.

Since the plan is goal-based and values-rooted, both the investor and the financial professional involved have spent considerable time on its articulation. There are shared responsibilities between them. Trust strengthens as they live up to and follow through on those responsibilities. That continuing engagement promotes commitment and a view of success.

Think of a comprehensive financial plan as your compass.

Accordingly, the financial professional who works with you to craft and refine the plan can serve as your navigator on the journey toward your goals.

The plan provides not only direction, but also an integrated strategy to try and better your overall financial life over time. As the years go by, this approach may do more than “make money” for you – it may help you to build and retain lifelong wealth.

Click here to download this article as a PDF.


This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 - cnbc.com/2017/01/04/most-investors-didnt-come-close-to-beating-the-sp-500.html [1/4/17]

How Much Income Can You Take Home in 2018?

LifetimeFinancialStrategiesIncome.jpeg

Reviewing Your Form W-4 After TCJA

By Jeremy Rodriguez, JD
IRA Analyst

With the tax deadline having just passed, now is the perfect opportunity to start planning for next year. Last year’s return should be readily available, and you may even have many important items committed to memory. Additionally, four months into the year is the perfect time to begin making current year projections. Of course, this year is different. That’s because 2018 will be the first we file under the changes created by the Tax Cuts and Jobs Act (TCJA).

One thing you should do is reexamine your withholding. Back in February, the IRS released an updated withholding calculator that reflects changes under the new tax law. You can find the new withholding calculator here (https://apps.irs.gov/app/withholdingcalculator).  The great thing about using the calculator is that you won’t have to deal with the new W-4 worksheets. The IRS specifically encourages taxpayers who fall into the following groups to double-check their withholding:

1.    Two-income families;

2.    Taxpayers with two or more jobs at the same time or who only work for part of the year;

3.    Taxpayers with children who claim credits such as the Child Tax Credit;

4.    Taxpayers who itemized deductions in 2017; and

5.    High income taxpayers and those with complex returns

To use the calculator, you’ll need your most recent pay stub (and your spouse’s, if applicable). Don’t bother starting if you don’t have this information; it’s practically impossible without it. You should also have a copy of your 2017 tax return. While not completely necessary, it will help you more accurately estimate potential deductions and credits. Finally, any other sources of income you expect to receive, along with anticipated deductions, should be factored in. Remember, underestimating your income can lead to a tax bill at the end of the year, so you want to be accurate.

The website will immediately ask you for your filing status and whether you can be claimed as a dependent. After that, you’ll indicate whether you expect to claim any credits for 2018, such as the Child and Dependent Care Credit or the Child Tax Credit. Remember, TCJA enacted major changes to the Child Tax Credit, including doubling the amount (i.e., $2,000 per qualifying child), increasing its refundable portion, and dramatically increasing the phase-out thresholds. In 2018, the credit does not begin to phase-out until adjusted gross income reaches $200,000 for a single filer and $400,000 for married couples filing jointly; compare that to 2017, where the credit began to disappear for married couples that earned more than $110,000! TCJA also added a commonly overlooked $500 non-child dependent credit to help offset the loss of the personal exemption. The calculator automatically calculates this credit based on your information.

In the next section, you’ll enter your expected wages and bonuses for 2018. This is the part where the current paystub becomes essential. In addition to wages, you’ll include your projected yearly contributions to any tax-deferred retirement plan, such as a 401(k) or 403(b) plan and any pre-tax cafeteria plan (e.g., any health insurance or flexible spending account plan). Find the amount you contribute per pay period and multiply it by the number of pay periods in a year. Your payroll statement may have year-to-date information making this task much easier. Finally, enter the total federal income tax withheld from your pay this year and the rate withheld per pay period. For this step, do not include Social Security, Medicare, state, or local withholding.

The last section will ask about estimated itemized deductions. This is where a copy of your 2017 return will come in handy. The calculator takes into account the increased standard deduction for 2018 ($12,000 for individual and $24,000 for married couples filing jointly). Therefore, it will use the larger of the two numbers (i.e., estimated itemized deductions vs. standard deduction) to estimate your taxes. Once all this information is entered, the website will give you the following information:

1.    Your anticipated 2018 income tax;

2.    The amount that will be withheld if you do nothing, and whether you will receive a bill or a refund on that basis;

3.    A withholding adjustment you can make to come closer to your anticipated 2018 income tax; and

4.    The amount of any refund or payment expected if the recommended changes are adopted.

With the new tax law kicking in, it’s likely that your taxes will be much different next year. Thus, it’s better to plan now than wait for a surprise next April. In fact, you may be able to adjust your withholding and take home additional pay immediately! All it takes is delivering an updated Form W-4 to your human resources or payroll department.

What Are Your Odds of Being Audited?

Lifetime-financial-strategies-calculator.png

They are low, unless you show the I.R.S. some conspicuous “red flags” on your return.

Provided by Angel McCall CFP®

Fewer than 1% of Americans have their federal taxes audited. The percentage has declined recently due to Internal Revenue Service budget cuts. In 2016, just 0.7% of individual returns were audited (1 of every 143). That compares to 1.1% of individual returns in 2010.1,2

The rich are more likely to be audited – and so are the poor. After all, an audit of a wealthy taxpayer could result in a “big score” for the I.R.S., and the agency simply cannot dismiss returns from low-income taxpayers that claim implausibly large credits and deductions.

Data compiled by the non-profit Tax Foundation shows that in 2015, just 0.47% of Americans with income of $50,000-75,000 were audited. Only 0.49% of taxpayers who made between $75,000-100,000 faced I.R.S. reviews. The percentage rose to 8.42% for taxpayers who earned $1-5 million. People with incomes of $1-25,000 faced a 1.01% chance of an audit; for those who declared no income at all, the chance was 3.78%.2    

What “red flags” could prompt the I.R.S. to scrutinize your return? Abnormally large deductions may give the I.R.S. pause. As an example, suppose that you earned $95,000 in 2016 while claiming a $14,000 charitable deduction. Forbes estimates that the average charitable deduction for such a taxpayer last year was $3,529.3

Sometimes, the type of deduction arouses suspicion. Taking the Earned Income Tax Credit (EITC) without a penny of adjusted gross income, for example. Or, claiming a business expense for a service or good that seems irrelevant to your line of work. A home office deduction may be ruled specious if the “office” amounts to a room in your house that serves other purposes. Incongruous 1099 income can also trigger a review – did a brokerage disclose a big capital gain on your investment account to the I.R.S. that you did not?4

Self-employment can increase your audit potential. In 2015, for example, taxpayers who filed a Schedule C listing business income of $25,000-100,000 had a 2.4% chance of being audited.2

Some taxpayers illegitimately deduct hobby expenses and try to report them on Schedule C as business losses. A few years of this can wave a red flag. Is there a profit motive or profit expectation central to the activity, or is it simply a pastime offering an occasional chance for financial gain?

If you are retired, does your audit risk drop? Not necessarily. You may not be a high earner, but there is still the possibility that you could erroneously claim deductions and credits. If you claim large medical expenses, that might draw extra attention from the I.R.S. – but if you have proper documentation to back up your claims, you can be confident about them.

The I.R.S. does watch Required Minimum Distributions (RMDs) closely. Failure to take an RMD will draw scrutiny. Retirees who neglect to withdraw required amounts from IRAs and employer-sponsored retirement plans can be subject to a penalty equal to 50% of the amount not withdrawn on time.1

The fastest way to invite an audit might be to file a paper return. TurboTax says that the error rate on hard copy returns is about 21%. For electronically filed returns, it falls to 0.5%. So, if you still drop your 1040 form off at the post office each year, you may want to try e-filing in the future.4

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.   

Citations.

1 - kiplinger.com/slideshow/retirement/T056-S011-9-irs-audit-red-flags-for-retirees/index.html [3/17]
2 - fool.com/retirement/2017/02/06/here-are-the-odds-of-an-irs-audit.aspx [2/6/17]
3 - forbes.com/sites/baldwin/2017/01/23/tax-guide-deductions-and-audit-risk/ [1/23/17]
4 - fool.com/retirement/2016/12/19/9-tax-audit-red-flags-for-the-irs.aspx [12/19/16]

 

Did the Stock Market Drop Rattle You?

 Image courtesy of pexels.com

Image courtesy of pexels.com

Crises pass, and markets eventually regain equilibrium.

Provided by Angel McCall CFP®

We have seen some uneasy times lately.

This past Monday the DOW dropped 1,175 points - a record single day point decline. Uneasiness impacts the financial markets. When it does, we all need to keep some long-term perspective in mind. Those who race to the sidelines and exit equities may regret the choice when crises pass.

Wall Street loves calm. Traders literally want “business as usual,” every day. If breaking news disrupts that calm, it can rattle the market – but every investor must realize that these disruptive events are exceptions to the norm. (If the major Wall Street indices rollercoastered dramatically every day, who would invest in stocks to begin with?) 

History shows how the market has bounced back in the past.

You probably know the old financial industry saying: past performance is no guarantee of future results. That is certainly true, but it is also true that the major indices have staged some impressive recoveries when confronted with turbulence. After the crash this past Monday, by Tuesday the market had already recovered half of its losses.

Market dips like the one we experienced this past week are like self-perpetuating fear loops. Inexperienced, uneducated investors pull out, which causes the market to dip further. Computer algorhythms written to buy or sell stocks are then triggered to sell, which again, causes the market to dip further. At this point, experienced asset managers buy, because they know that the market will recover. Unless the sell-off is connected to a systematic event in global markets, there is no cause for concern during a dramatic correction.

Stock market corrections happen regularly.

This past week reminds us these ups and downs are simply the nature of the stock market. Although startling corrections may be unsettling, historically, these fundamentals have been supportive of the market.

Investing for Volatile Markets

My clients are in well-diversified portfolios specifically tailored to their risk, goals and time frames. The amount of U.S. stocks ranges from 8% to 28%.  The big dip and recovery this week minimally affected their portfolios.

The remaining investments are stocks from around the world and a variety of bond classes. I also incorporate a really good hedge fund that can “go anywhere”  to reduce portfolio volatility.  This fund has only had 1 down years in the last 20 years, and when the S&P went down 37% in 2008, this fund was up 5.33%.

 

Portions of this material was prepared by MarketingPro, Inc., and does not necessarily represent their views.All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.    

Citations.
1 - businessinsider.com/stock-market-news-buy-the-dip-bulletproof-rebound-2017-8 [8/15/17]
2 - investopedia.com/financial-edge/0911/how-september-11-affected-the-u.s.-stock-market.aspx [9/11/17]
3 - investopedia.com/news/why-stock-market-correction-may-rattle-investors/ [7/18/17]
4 - latimes.com/business/hiltzik/la-fi-hiltzik-market-corrections-20170530-story.html [5/30/17]

For the Millennials in Your Life

Angel McCall CFP Colorado Lifetime Financial Strategies.jpg

2 Estate-Planning Documents Millennials Need

By Angel McCall CFP®

Ask yourself this: If I got into a car accident tomorrow and became incapacitated, who would make medical decisions on my behalf? Do you know if that person’s decisions would be in line with your wishes? Do you know who would pay your bills? If these questions concern you — and they should — it’s time to start thinking about some basic estate planning even if you don’t have a spouse or children or a substantial amount of wealth to pass on.

That’s right; even young, single people need to do some estate planning. The good news is that you don’t need an elaborate, complex plan at this point. You can set up a plan for your medical and financial affairs by executing two simple documents — an advance health-care directive and a durable power of attorney — and you can do it in less than 30 minutes.
 

1) Advance health care directive

An advance health care directive comprises a living will and a health care proxy.

  • A health care proxy allows you to name someone who will have the legal authority to make health care decisions for you in this situation. Give this a lot of thought — it’s a big job for the person you choose.

In Colorado, if you have not designated someone to make these decisions, you family will need to have the Court appoint someone.

  • A living will lays out your wishes for your medical care, should you become incapacitated. It covers topics such as whether you want your life to be artificially prolonged if you are in a vegetative state or have a terminal condition.

 Why is it so important to do this? Every state has different laws regarding who can make medical decisions on your behalf if you become incapacitated.

However, what if your family members disagree? The infamous case of Terri Schiavo — who remained in a persistent vegetative state for years while her family fought over what to do — is a sad example of the worst-case scenario when someone becomes incapacitated without an advance health care directive. Having this document is good for you because it ensures that your preferences for your medical care are put into writing and known in advance. It’s good for your family because it removes a lot of the guesswork and potential for family conflict over your care.

You can find out more information and free forms at: http://coloradoadvancedirectives.com/advance-directives-in-colorado/
 

2) Durable power of attorney

A durable power of attorney is a legal document you can use to designate a person to handle financial transactions on your behalf. While some powers of attorney are used for single transactions, a durable power of attorney gives the designated person the power to essentially step into your shoes and act “as you” in handling all of your financial affairs if you become incapacitated. Don’t let the name deceive you — the person you choose does not have to be an attorney. Most people choose their most trusted friend or family member.

If you become temporarily incapacitated, you’ll want someone to be able to pay your mortgage, deposit checks, file your tax return and take care of other financial obligations for you so you won’t be facing financial disaster when you recover.

In the unfortunate case that your incapacitation is permanent, it will be much easier on your family and friends if you’ve designated someone ahead of time to handle your financial affairs. As with the advance health care directive, having a durable power of attorney in place for your financial affairs is good for both you and your loved ones. You can find forms for these documents online for free.

You don’t need to consult with an attorney, but it can’t hurt if you want to be thorough. For the advance health care directive, be sure to use a form that applies to the state where you live.  you can search for “advance health care directive form” and your state’s name to find the right one. Durable power of attorney forms don’t differ from state to state. You can find a free form online.

With both forms, be sure to follow the instructions to the letter; otherwise, they may not have legal authority. Once you have executed them, keep both digital and hard copies for yourself in a place where they can be easily found. Then, give copies to the people you designate as your health care proxy and attorney-in-fact, your primary-care physician and any other friends or family members you think should be involved.


A Good start...

As you probably know, these two estate-planning documents don’t constitute a complete estate plan. However, if you are young and single and don’t have significant assets, you may not need a will. It certainly couldn’t hurt, though, and if you want to be thorough, you can draw up a simple will online for around $60.

For many young professionals, the bulk of their financial assets are in retirement accounts, which generally don’t pass by will. These assets are transferred automatically at your death to the beneficiary you have listed on the account, so make sure that information is up to date. Doing so can add another important element to your starter estate plan.

Taking these simple steps today will give you a good start on estate planning and can help make it easier on your loved ones if something happens to you. Of course, if you have more complicated estate-planning needs, you should consult an attorney.

Analyze Your Social Security Options

Socialsecrityanalysis.png

As part of the financial planning services that I offer, my software can guide you through filing decisions that could increase your annual benefit by as much as 76%1 and increase your lifetime benefit by tens of thousands of dollars.

As part of the financial planning services that I offer, my software can guide you through filing decisions that could increase your annual benefit by as much as 76% and increase your lifetime benefit by tens of thousands of dollars.

Identify Social Security filing strategies tailored to your unique needs

  • Learn how your Social Security will be taxed or reduced when you have additional income.
  • Know how divorce or death of a spouse will affect your benefits
  • Receive a personalized report
  • Position Social Security to help guide your retirement planning

For my current clients and clients of estate planning attorneys, this report is free. For non-clients, the analysis and report is only $60.

Call Angel at 720-373-4143 to order a report.

1 Based on an individual with full retirement age of 66, comparing early filing as age 62 and receiving reduced benefits of 75% of primary insurance versus delayed filing at age 70 and receiving credits to increase benefits by 32% of primary insurance amount.

Was Your Social Security Account Hacked?

Since the Equifax data breach affecting 143 million Americans, one of my clients told me that their online account had been suspended after someone tried - unsuccessfully - to log into their account.

The pilfered information which includes Social Security numbers, name, birthdate and address could possibly lead to a diversion of benefits or changes to an account to allow access for many years without your knowledge.

To date, the SSA has not sent out widespread notice to Americans on extra security measures to take to protect their account.

Whether or not you are receiving Social Security benefits, I suggest that you check to make sure that your online info is secure.

If You Have Not Set Up an Online Account Previously:

 Create your account today and take away the risk of someone else trying to create one in your name. It only takes a few minutes to set up an account at: http://www.ssa.gov/myaccount/.  The Equifax hackers have enough information to do this.  If you suspect someone has created a fraudulent account in your name, you should begin by contacting the toll-free Social Security Administration Fraud Hotline at (800) 269-0271.)

If You Already Have an Online Account:

If you have not signed into your account lately, you should do so to see if a hack attempt has been made.  (There will be a notice when you log in if this has happened.)

There are extra security measures available to add additional security that include:

  1. Info from your W-2 tax forms or self-employment tax form.
  2. Upgraded code mailed to your home with instructions on how to use this code to finalize your upgrade.
  3. You can choose to have a one-time code texted to your cell phone or sent to your e-mail address on file as an added security measure.