$pring Cleaning Tip 13: Do you have enough insurance coverage for home, auto, health and life? Are your beneficiaries up to date? A MUST DO!
Spring is traditionally the time to clean up the old and get ready for the new. Why should your finances be any different? Now is the perfect time to spring clean your retirement plans.
Check the beneficiaries on your existing IRAs, 401k and 403B accounts
Assets held in these types of accounts (Roth IRAs too!) will pass outside of your will. This means that your retirement assets will pass to the beneficiaries that you named when you opened your account. So, make sure that the beneficiaries that you named are still those that you want to pass your retirement assets to. –You would be amazed at how many ex-spouses are the beneficiaries of their former spouses 401ks! This oversight leaves the current spouse with no claim to these 401k assets.
Reclaim the 401k or 403b held at a former employer
Many folks have the set it and forget it mentality especially when it comes to their retirement assets held in an account at a former employer. Well, this is probably not the best idea.
Consciously decide what to do with your 401k, 403b, IRA held at a former employer. Do you really need to leave your monies there? Should you move them to your current employer’s 401k? Or should you roll the monies over into an IRA? These questions need to be answered and action taken. If you are not sure what to do, consult with a trusted financial advisor. Research your options and take action. Make time to reclaim your abandoned retirement money!
Review and adjust your portfolio asset allocations
While most of us are content to let ‘things rock along’ and leave our investments untouched for years, your retirement portfolio should be analyzed and rebalanced annually. Make sure that you have an asset allocation plan and stick to it.
In keeping with your plan for asset allocation, sell both assets that have gone up and holdings that no longer serve you. Then, buy more of the assets that have gone down in value. It’s the perfect way to execute your ‘buy low, sell high’ strategy.
Springtime is the perfect season to ‘till the asset allocation soil’ and prepare your portfolio for future growth, check your beneficiary designations and reclaim those 401ks that you have left as orphan investments .
If you need help with your asset allocation or reclaiming your abandoned retirement accounts, just give me a call at 770-333-0113 option 1 x110.
Jane Nowak is a CERTIFIED FINANCIAL PLANNER™ and Certified Divorce Financial Analyst ™ at Kring Financial Management in Atlanta, GA. Jane is a Retirement Specialist and Divorce Financial Analyst who provides financial planning for clients in their prime.
She has recently had articles published or has been quoted in articles that have appeared online at theNASDAQ, Yahoo Finance, Womenetics.com, Smart Money Chicks, Fox Business News, CreditCards.com, U.S. News &World Report, Financial Planning Association (FPA) and Equifax Personal Finance blog web sites.
October is the time to add some Financial Planning to your life! The Georgia Chapter of the Financial Planning Association as well as FPA Chapters across the nation have named October 3rd through the 9th as Financial Planning week.
So Why all the Hubbub around Financial Planning?
There are many studies[i] that have been done over the last several years about Americans who have a financial plan and those who don’t. And as self-serving as it many sound, those Americans surveyed who have a financial plan and work with financial planners have many common characteristics. Americans who work with a financial planner:
- Feel more confident about their financial futures
- Have a clear financial direction
- Are more likely to know how much they need to save for retirement
- Feel ready to deal with market ups and down
- Are more optimistic about their financial futures
- Are able to save more than average
Having been a financial planning client for many years before I decided to make Financial Planning my encore career, I can honestly say that I enjoyed many of the above advantages. A consistent relationship with a financial planner did give me confidence, peace of mind and an annual review of my financial situation and investment direction.
Many Americans Say: It’s All in Their Head
Tongue in cheek, I’m talking about American’s financial plans. A recent survey sponsored by the CFP® Board showed that, 86% of the survey respondents agreed with the idea that everyone should have a financial plan. And, 79% said they have a plan in place. However, less than half of the respondents have a formal plan in place––46% said they just have a plan in their head, and 11% just have notes and ideas.[ii]
Folks, unless you have already met your financial goals, having ideas in your head about your financial plan, just won’t cut it. Many of the formal written plans that I do for middle-income clients have more than 10 pages of information and two pages of recommendations. How can anyone keep all that detailed information in their head?
After having said that having a formal financial plan is important, I think the survey respondents were simply trying to save face. It is clear to me that they really have no financial plan. And, if you haven’t heard me say this before, ’If you fail to plan, you plan to fail.’
I know most folks are just plain overwhelmed by just the thought of doing a financial plan. But, I do urge you to give yourself the gift of a financial plan and a long-term relationship with a trusted financial advisor. That way you can work on reaching your financial dreams and goals year over year, one step at a time.
Here are two sources that I trust will give you good advice on what questions to ask, what to consider and how to choose a financial planner.
Celebrating Your Very Own Financial Planning Month
Take at least one step forward with your own financial planning by doing one or more of the activities below taken from The FPA of Georgia’s article titled 20 Ways to Celebrate Financial Planning Week [iii]:
- Balance your checkbook
- Start a savings account for a child, vacation or a gift for yourself
- Help teach your children how to save and spend wisely
- Get your estate in order: Create or revise your will and other estate-planning documents
- Call your financial planner and share your appreciation for their service
- Pay off a credit card
- Establish an emergency fund
- Evaluate your employee benefits and begin planning for open enrollment
- Develop your holiday spending budget
- Plan for year-end tax strategies
- Purchase a session with a financial planner for a relative, friend or colleague
- Give a relative, friend or colleague a subscription to a personal finance magazine
- Invite a financial planner to speak at your workplace
- Review your insurance coverage
- Write down your financial goals and revisit them periodically
- Start using personal finance software to help you better understand your money
- Look up three financial terms that have baffled you and resolve to understand them
- Talk to a relative about their plans for long-term care
- Talk to your relatives about your plans for long-term care
If you have thought about working with a financial planner, now is always the best time to move forward. And, begin today by completing one or more of the suggested ways for you to celebrate Financial Planning week.
As always I welcome your comments and suggestions for future articles.
Jane Nowak is a CERTIFIED FINANCIAL PLANNER™ specializes in AT&T Retirement Plans, Women’s Retirement and Financial Planning for Women. Located in the Smyrna, Marietta, Vinings area of Atlanta, GA, Jane’s goal is to educate and empower her clients to take control of their daily finances so they can fully fund their retirement dreams and needs. Jane has recently had articles quoted and published on-line at the NASDAQ, Yahoo Finance, Womenetics.com, Smart Money Chicks, Fox Business News, CreditCards.com, U.S. News and World Report and Financial Planning Association (FPA) websites.
Securities offered through Triad Advisors, Inc. Member, FINRA/SIPC
[i] Surveys by ING and Ameriprise Financial
[ii] The findings from the survey of 1,011 adults, conducted earlier this month by Certified Financial Planner Board of Standards Inc. in tandem with KRC Research
[iii] FPA of Georgia 20 Ways to Celebrate Financial Planning Week http://www.fpanet.org/WhatisFinancialPlanning/FinancialPlanningWeek
Read:#Boomer Women Focus More on #Retirement Finances than Health @RRMagazine http://ow.ly/6C69O I’m not convinced that this is true.