FPA-NENY Educational Articles

10 Tips for Digging Out from Under Holiday Debt

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So, the giving spirit got the best of you this past holiday season, leaving you wondering how you can afford to pay down those bloated credit card balances and holiday debt.

 

Debt from overzealous holiday spending can quickly snowball because of interest charges, leaving people with mounting balances to show for their generosity. And those balances are only going to get larger without taking quick action. Here are 10 initial steps to consider taking:

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  1. Transfer balances to a zero-interest or extremely low-interest credit card. Take advantage of attractive interest rate offers that credit card providers often dangle to lure consumers. Utilizing an offer along the lines of 0% interest for 15 months, for example, can save hundreds, even thousands, of dollars in interest charges and help you pay down your credit card debt faster. Be sure to read through the terms (such as the window for completing transfers and related fees associated with the new card) before applying for the transfer. To find balance-transfer offers with the most favorable terms, check out websites such as bankrate.com or creditkarma.com.

 

  1. Make a holiday debt-reduction plan. As overwhelming as digging out may seem, having an actual plan can make the process feel much more manageable. A Certified Financial Planner™ can help develop a plan that’s achievable and tailored to your specific circumstances. To find a CFP® in your area, visit the Financial Planning Association’s national database at www.PlannerSearch.org.

 

You can also get free debt-reduction counseling from an organization such as www.credit.org, which also provides debt-reduction plans for a small fee.

 

Or you can use an app such as PowerPay (free via www.powerpay.org) to make a plan yourself. Developed by the University of Utah, it offers tools to develop your own self-directed debt-elimination plan. Another app, www.ReadyforZero.com (also free for users), allows you to link various accounts (for loans, credit cards, mortgages), then create a personalized payoff plan that includes reminders and tools to track your progress. Debt repayment calculators and other online tools also are available online at sites such as bankrate.com and creditkarma.com.

 

  1. Set your payment priorities. If you’re carrying balances on multiple cards, focus on paying down those with the highest interest rates. And make a point of at least making the minimum monthly payments on all your accounts to avoid extra fees.

 

  1. Tap into an emergency fund or checking account to pay off balances. The emergency fund that financial planners recommend people maintain may be used for unforeseen circumstances such as these, says Rose Swanger, a Certified Financial Planner™ with Advice Finance in Knoxville, Tenn. Or, if you have some extra money in your checking account after paying off other expenses, apply it toward credit card debt.

 

  1. Tap the equity in your home. Talk to a Certified Financial Planner™ or debt counselor about whether it’s in your best interest to take out a home equity line of credit to consolidate and pay down your debt. This can make sense particularly if the interest rate on the HELOC is lower than that applied to your credit card balance(s).

 

  1. Identify areas of discretionary spending that you can apply to pay down holiday debt. Sacrificing that daily macchiato, occasional mall shopping excursion or other source of discretionary spending in order to pay off credit card balances may hurt, but getting out of debt quicker makes it worthwhile.

 

  1. Sell stuff you don’t need or want. In the dark corners of a garage, basement, attic, closets and/or storage unit may reside items that you could sell (via a yard/garage sale or a site such as craigslist.org) to raise cash to pay down debt.

 

  1. Curb your use of plastic. Don’t exacerbate the problem by continuing to use a credit card on which you carry a balance.

 

  1. Apply tax refunds, holiday bonuses, stock dividends and the like to pay off debt. Rather than running out to spend such a windfall, put it to constructive use by applying it directly to a credit card balance.

 

  1. Try negotiating new payment terms. Some credit card providers may be open to discussing more favorable payment terms with you, according to Swanger, especially if your credit rating and payment history are strong.

 

This column is provided by the Financial Planning Association® (FPA®) of Northeastern New York, the principal professional organization for Certified Financial PlannerTM (CFP®) professionals. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Northeastern New York if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.

Building a Retirement Nest Egg: Smart Approaches to Growing and Protecting Your Assets

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From Baby Boomers over age 50 who have been part of the workforce for several decades to Millennials in their twenties who are relatively new to the working world, Americans of all generations share a dream: to live comfortably later in life, with the lifestyle they desire, free from worries about running out of money.

 

Indeed, one reason people spend so much of their lives working is to earn money not only to meet their needs and wants today, but also to build a nest egg of savings they eventually can use during retirement.

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Growing and protecting that nest egg is important, whether you plan to retire soon, decades from now or perhaps not at all. Here financial planning experts from the Financial Planning Association offer suggestions for how to go about it:

 

  1. Enlist a retirement planning expert to develop a plan: Having dreams and goals you want to fulfill later in life means little without a plan to fulfill them. For an investment of just a few hours of your time and perhaps as little as a few hundred dollars, a Certified Financial Planner™ can help you develop a well-articulated strategy to get where you want to go in life, both in the near term and over the long haul, using a holistic, multi-disciplinary approach that encompasses investing strategy, retirement and insurance planning, debt management, tax planning and more. To find a CFP® in your area, check out the Financial Planning Association’s national database at www.PlannerSearch.org.

 

With a plan in place, you’re less likely to worry about financial security during retirement. Indeed, workers with a retirement plan are more than twice as likely to be “very confident” about having enough retirement savings as workers who lack a plan, according to recent findings by the Employee Benefits Research Institute.

 

  1. Commit to saving: Setting aside even a small amount of your earnings each month in some kind of tax-favored retirement plan, such as a 401(k) or individual retirement account (IRA), can result in a sizable nest egg for retirement. Set up an automatic deposit to help you stick to the savings commitment. Start early or start late, but be sure to save something. While it’s optimal to start saving earlier to give assets more time to grow in value, it’s not too late for people in their forties and fifties to begin saving.

  1. Maximize retirement plan contributions: One rule of thumb says to set aside 10-15% of your salary each year in a retirement account, according to Scott Ranby, a Certified Financial Planner™ with Kuhn Advisors in Denver, CO. Another is to save eight times your ending salary. “So, if you earn $80,000 [a year when you retire], your goal should be to end up with $640,000 when you retire,” he says.

 

To reach those goals, consider contributing as much you can afford, and as much as the law allows, to your retirement plan. The tax code sets limits on the amounts individuals and couples can contribute to various types of retirement accounts in a given year. Ask a tax specialist what those limits are for you, and plan accordingly.

 

While it’s not formally classified as a retirement savings vehicle, a Health Savings Account is another tool to maximize retirement savings, says Certified Financial Planner™ Andrew Weckbach, founder of Scaling Independence in St. Louis, MO. Not only can a person deposit money into an HSA tax-free (up to a specified amount each year) and remove it tax-free to cover qualified medical expenses, they can leave money in the account and utilize investment options tied to the account to grow that money over time. “They can keep saving money into the account until retirement, then use it like an IRA, withdrawing money from it to use for medical or non-medical expenses, and paying taxes on the withdrawals like they would on withdrawals from an IRA.”

  1. Prioritize tax diversification: It’s unwise to put your retirement nest egg in one basket, Weckbach cautions. For maximum flexibility and efficiency when the time comes to start spending down your nest egg, seek diversity in the tax categorization of your assets. Rather than put all your assets in qualified (pre-tax) retirement plans such as a 401(k) or traditional IRA, where contributions go in tax-free and are taxed on the way out, also be sure some of your assets reside in Roth accounts, where money is taxed on the way in, not the way out). It also makes sense in many situations to have some retirement assets in a taxable account, such as a brokerage account in which stocks and other assets are held outside a traditional retirement plan.

  1. Seek asset diversification: The same all-eggs-in-one-basket adage applies to the type of assets you own. History tells us that one of the best ways to grow your money and increase your net worth is by building a diversified asset portfolio of stocks, bonds, mutual funds, exchange-traded funds (ETFs), real estate, etc.

 

If you’re lucky enough to have a employee pension plan from which to draw a guaranteed income throughout retirement, that, too, may dictate the approach to asset diversification. “Having a pension in your back pocket allows you to be more aggressive with some of your investments,” explains Weckbach.

 

A financial professional with investment expertise can provide valuable guidance in developing a diversified portfolio with an age- and objective-appropriate allocation strategy.

  1. Revisit your asset allocation strategy periodically, reallocating and rebalancing assets as circumstances and life stage dictate. “Ignore the short-term noise of the [stock] market and its inevitable stretches of volatility,” Ranby urges. “Focus on your long-term plan.”

 

 

November 2015 — This column is provided by the Financial Planning Association® (FPA®) of Northeastern New York, the principle professional organization for Certified Financial PlannerTM (CFP®) professionals. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Northeastern New York if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.

 

More Perks at Work: A Guide to Maximizing Voluntary Benefits

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For many people in the working world, the onset of fall means it’s benefits election season: time for employees to review and choose from among the workplace benefits offered by their employer.

 

Known as the “open enrollment period,” this annual window for employees to evaluate and select benefits offers an excellent — yet often overlooked — opportunity for workers to maximize their on-the-job compensation by taking advantage of the voluntary benefits available to them, whether it’s certain forms of insurance or less traditional benefits such as wellness incentives, identity theft protection, or even pet insurance.

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Voluntary benefits are offered by employers as add-ons to a core benefits package. Employees usually pay for them out of their own pockets, in most cases via an automatic payroll deduction.

 

Don’t be deterred by the extra cost, and don’t infer from the “voluntary” label that they’re superfluous, however. From an employee’s perspective, voluntary benefits are a powerful way to enrich your compensation package, asserts Darin Shebesta, a certified financial planner with Jackson/Rosskelley Wealth Advisors in Scottsdale, Ariz. “Virtually every aspect of a person’s financial life is touched by their [workplace] benefits. But few people take the time to really look at them. They’re leaving benefits on the table that are rightfully theirs.”

 

Don’t let another open enrollment season pass without at least investigating the voluntary benefits offered by your employer. Here are some that can deliver valuable perks at an affordable price:

 

An employer-sponsored retirement plan typically comes with a limit on annual tax-favored contributions, depending on the type of plan. Shebesta suggests contributing as much as you can afford, not only into so-called “qualified” retirement accounts such as a 401(k), where money is taxed on the way out, not the way in (pre-tax), but also to a Roth account, where money is taxed on the way in, not the way out (after-tax).

 

If your employer has some form of program to match your retirement plan contributions, take full advantage of it, he says. These matching contributions essentially amount to extra income for you — income that, when invested, has a chance to grow over time.

 

Health insurance: If your employer offers a high-deductible health plan (HDHP) that comes with a health savings account (HSA) option, consider it. “Everybody should have access to an HSA for the flexibility they provide,” Shebesta says. That flexibility includes the ability to deposit a certain amount annually into the account tax-free, then take it out (also tax-free) to pay for qualifying medical expenses. For people over 50, it’s worth considering using HSA money to pay for a long-term care insurance (LTCI) policy, according to Shebesta, because LTCI can protect a person from potential financial devastation if they should require expensive care for an extended period.

 

It’s also worth taking advantage of health and wellness benefits and incentives, if your employer offers them, says Shebesta. Some employers may offer a health club membership or discounts on membership fees as a benefit to employees. Others may offer financial incentives to employees who undergo preventive medical tests, for example.

 

HSAs also function as useful retirement savings vehicles, providing an IRA (individual retirement account)-like home for pre-tax dollars, whereby funds deposited in the account can be withdrawn for non-medical purposes starting at age 65. As with funds inside a qualified IRA, the account owner will in most cases be required to pay income tax on that money on the way out. “The HSA works almost like an alternate retirement plan,” Shebesta explains. “It’s basically another pre-tax investment vehicle.”

 

Life insurance is a worthwhile investment, particularly when you have someone else dependent on you and your income, such as a spouse, life partner and/or children, he says. Oftentimes, a life insurance policy is more affordable when purchased through an employer, where a person may gain access to special group rates and/or avoid medical underwriting.

 

If your employer doesn’t offer disability insurance as a core benefit, it’s worth investing in is an optional benefit, according to Shebesta. Long-term disability insurance in particular is a valuable tool to protect your earning power — the biggest asset you have — by replacing income that’s lost if you’re no longer able to work due to an injury or disability. He suggests getting as much optional long-term and short-term disability insurance as possible.

 

Additional voluntary benefits worth considering:

  • Long-term care insurance, particularly for people 50 and over. LTCI coverage can be less expensive when purchased through a group. “Before age 50, I recommend focusing on disability coverage. After that, start looking at long-term care coverage,” Shebesta suggests.
  • Legal plans: Legal plans provide ready access to legal counsel from a network of attorneys, making them handy for services such as drawing up a will or a contract, filing or responding to a legal complaint, etc. “You pay a couple of bucks a month for what amounts to a couple thousand dollars worth of legal help,” says Shebesta.
  • Identity theft protection: Identity theft topped the Federal Trade Commission’s national ranking of consumer complaints for the 15th consecutive year in 2014.
  • Reimbursement for education expenses, such as graduate school.

 

…and the list goes on. The selection of voluntary benefits that an employer can offer employees is broad and expanding. What’s more, offering voluntary benefits costs employers virtually nothing, as employees are the ones paying for them. So if you hear about a voluntary benefit you think your employer should offer, Shebesta says, “don’t be shy about approaching the HR department about it.”

 

November 2015 — This column is provided by the Financial Planning Association® (FPA®) of Northeastern New York, the principle professional organization for Certified Financial PlannerTM (CFP®) professionals. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Northeastern New York if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.

IRA Rollovers: A How-To

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Individual retirement accounts, or IRAs, are the most popular savings vehicle in America for a good reason: They represent a flexible, tax-advantaged and (usually) relatively simple-to-manage vehicle in which to set aside money for retirement.

IRAs held about $7.4 trillion in retirement funds as of the end of 2014, more than any other type of retirement account, according to the Investment Company Institute. But alas, IRAs are governed by a sometimes-complex set of tax rules, especially when transferring money to, from and between accounts, moves commonly termed IRA “rollovers.” Running afoul of the rules means potentially losing the flexibility, simplicity and tax-favored status that make IRAs so appealing. Read on to learn how to preserve those advantages and spare yourself major rollover headaches.

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What is an IRA rollover? What does the process entail? An IRA rollover is a process by which the owner of a retirement account instructs the custodian or trustee managing that account (such as a mutual fund company) to distribute a specified amount of money from the account for the purpose of rolling that money into another separate account.

There are several general types of rollovers: (1) from one traditional IRA to another traditional IRA; (2) from a traditional IRA to a retirement plan such as a 401(k) or 403(b); (3) from a retirement plan such as a 401(k) or 403(b) to a traditional or Roth IRA.

Before undertaking an IRA rollover, it’s important to get up to speed on IRS rules that govern the process, says Nate Wenner, a certified financial planner™ (CFP®) and certified public accountant with Wipfli Hewins Investment Advisors in Edina, Minn. Those rules specify the process to which rollovers must adhere to avoid triggering a taxable event, along with the types of distributions that can be rolled over (called “eligible rollover distributions”).

Before executing a rollover involving a retirement plan such as a 401(k) or 403(b), also familiarize yourself with the rules and conditions governing distributions to or from that plan (depending on whether you’re rolling funds from the plan, into an IRA, or vice versa).

What are some of the reasons to consider an IRA rollover? Rollovers can happen by choice or be triggered by an event. Here are some of the most common reasons they occur:

  • Separation from employment, such as due to job loss or retirement, whereby the person may need to execute a rollover because they’re no longer eligible to participate in their former employer’s plan.
  • To take advantage of broader or different investment options and/or lower investment fees with a different IRA or plan provider.
  • To consolidate numerous accounts with one custodian/trustee/plan to simplify portfolio management, etc.
  • When taking a new job, where it may make sense to rollover an IRA you have from a previous employer, into one offered by your new employer.
  • When a current employer that had not previously offered a retirement plan begins offering one.
  • To capitalize on the greater flexibility and access to funds that traditional IRAs tend to offer compared to some other types of retirement plans, according to Wenner.

What are the biggest pitfalls associated with IRA rollovers? The foremost concern in undertaking an IRA rollover, says Wenner, is ensuring the maneuver is executed according to IRS rules to avoid triggering a potentially costly taxable event.

The most important rules to know in this context apply to custody of the distribution (the funds) to be used in the rollover. Will that money transfer directly from one account custodian/trustee to the other account custodian/trustee? Or, will the distribution go to the account owner (typically the person in whose name the account is held), for them to eventually deposit in the new account to finalize the rollover?

The safest way to avoid a rollover-triggered taxable event, says Wenner, is to specify a direct custodian/trustee-to-custodian/trustee transfer, where the account holder instructs the custodian/trustee of one account (the one from which the rollover money will come) to directly transfer funds to the custodian/trustee of the account into which the funds will be rolled. Essentially the account owner removes themselves as the middle person by instructing the relevant financial institutions or plan administrators to handle the transfer directly. In doing so, be sure to contact the relevant institutions and/or administrators so you’re clear on how they intend to handle the transfer and what they may require from you to expedite it.

Since in this case there is no formal distribution to the account owner, there should be no taxable event to worry about — if the transfer is properly executed. The key here is to be sure the account holder specifies to the custodian/trustee that they want the money to be transferred directly to the other custodian/trustee on their behalf. In many cases that’s as simple as asking the custodian to make the check payable to the new custodian for the benefit (“FBO”) of you.

Otherwise, if the rollover distribution check from a plan or IRA is made payable directly to you, solely in your name, the amount may be subject to a withholding tax of 10% (for distributions from an IRA) or 20% (for distributions from a retirement plan).

Though it’s not always advisable given the risk of triggering a taxable event, in some cases the account owner may take custody of the funds earmarked for a rollover (i.e., the custodian makes the distribution check out in the name of the account owner), with the intent of ultimately depositing that money into another account to execute the rollover.

Under IRS rules, when the money from an IRA or retirement plan is distributed to the account owner during the rollover process (rather than transferred directly from custodian to custodian), the account owner has 60 days to deposit the rollover amount into another eligible plan, without triggering a taxable event. In this case, a distribution sent to the account owner in the form of a check payable to the receiving plan or IRA is not subject to withholding. However, the onus is on the account owner to get that rollover amount deposited into the other account within 60 days. If that doesn’t happen, the account owner likely will be on the hook to pay income tax on the amount of the distribution, in addition to a penalty if they’re under age 59½.

Three key takeaways:

 

  1. Take the direct transfer route and know the transfer rules that apply to the specific type of rollover — those of the IRS as well as those of the specific custodians/trustees/plans involved in the transfer.
  2. In the case of a direct transfer, be sure you’re clear whether the custodian/trustee/plan intends to send you a check made payable to the other custodian/trustee/plan, for you to forward, or if they will directly transfer your funds to the new custodian/trustee/plan.
  3. If they’re sending you a check in your name (again, not the optimal route in most cases), be sure to deposit that amount promptly into the other retirement plan or IRA account — and absolutely within the 60-day IRS limit.

 

Where can I go for help executing an IRA rollover? Begin by visiting the IRA/retirement plan rollover page of the IRS website at:

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Rollovers-of-Retirement-Plan-and-IRA-Distributions. Then consult a financial professional to help walk you through the process. To find a Certified Financial Planner™ (CFP®) professional in your area, check out the Financial Planning Association’s national database at www.PlannerSearch.org.

 

October 2015 — This column is provided by the Financial Planning Association® (FPA®) of Northeastern New York, the principle professional organization for Certified Financial PlannerTM (CFP®) professionals. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Northeastern New York if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.

Baby Steps: Financial Planning for Expectant Parents

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So, you’re expecting a baby. Congratulations — you’re in for quite a ride!

While you’re busy considering baby names, mulling color motifs for the nursery, working on your swaddling technique and otherwise basking in the glow of pending parenthood, it’s important to also focus on the practical stuff — the pressing financial issues to address before the Big Day comes, so you can spend more time savoring the magical moments (and enduring the not-so-magical sleepless ones) once the baby arrives.

Below are some of the high-priority financial planning items that personal finance experts suggest expectant parents put on their to-do list, with insights on how to go about addressing them.

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Household finances. Given the financial demands that come with new parenthood, babies might as well arrive with a price tag tied around their toe. All the baby gear (car seats, strollers, clothes, crib, etc.) is just the beginning. How much will you be required to pay out-of-pocket for perinatal care prior to and after the birth, and for the birth itself? How much income will the new parents forego taking time off work after the birth? What about the cost of childcare if both parents are working? Use the nine months of pregnancy as a window to devise a detailed household spending plan (i.e., a budget) that takes these and other factors into account, suggests Certified Financial Planner™ Brenda Knox, president of Financial Elements Inc. in Rolling Meadows, Ill.

To lessen the financial strain, consider shopping resale shops, garage sales, Craig’s List and the like for baby items, she suggests. And don’t be shy about asking relatives and friends if they have items to lend or give you.

Stashing cash for emergencies and baby-related expenses. Creating (or adding to) an emergency fund containing easy-to-access cash is especially important once a baby arrives, so you have a just-in-case account you can tap into for unexpected expenses. In addition to an emergency fund, consider establishing a savings account in which to set aside funds to cover the baby-related expenses you do expect, suggests Jim McGowan, a Certified Financial Planner™ at Marshall Financial in Doylestown, Pa., who specializes in wealth coaching for people in their twenties and thirties.

Get a handle on workplace benefits. If they’re employed, it’s important that each parent find out exactly what their employer offers in terms of paid and unpaid parental leave and short-term disability insurance, says McGowan, an expectant parent himself. Also consider reserving paid-time-off/sick days for when the baby arrives.

Do your health insurance homework. If both expectant parents are employed, compare health plans in terms of prenatal, postnatal and other maternity care and costs, then determine which plan to use for that care. If only one parent has healthcare through an employer, learn what is and isn’t covered under that plan.

Whether one or both parents have employer-provided health coverage, also find out about getting coverage for the baby, then be sure to add the baby to your plan promptly after the birth. Also be sure that if one parent is choosing to leave their job (and their health coverage) or go to a part-time work schedule following the birth, that you all still will have adequate health plan coverage going forward, says Knox.

Look seriously at life and disability insurance. Becoming a parent means you now have a “dependent” — a little person for whom you need to plan and provide should life take an unexpected turn. That means acquiring life insurance and disability insurance. McGowan suggests each parent invest in a term life insurance policy (with a fixed premium and a term of 20 or 30 years). He also recommends parents purchase long-term disability coverage to replace income they would lose should they become disabled. If your employer offers life and/or long-term disability insurance coverage as a workplace benefit, consider purchasing it. If not, purchase it privately with the help of an insurance agent.

Protect the little one, and other loved ones, by planning for the what-ifs. There’s never a “good” time to contemplate your own mortality what happens should you pass away. But with a baby on the way, there is a right time, and it’s now. Drafting a will (with the assistance of an estate attorney) is a top priority. This is a legal document specifying how your affairs are to be handled when you die (hopefully that’s a long way away!). In this context, your attorney may also recommend establishing some kind of trust to manage the transfer of your assets to your child(ren), notes McGowan.

In the will, be sure to specify who will assume guardianship of your child should both parents die while the child is still a minor. This is a vital step, as dependent children of people who die without legal documentation of their guardianship wishes may become wards of the state until the potentially lengthy legal process plays out. Your attorney also can help draft other important estate documents, including power of attorney, a healthcare proxy/agent/surrogate and an advanced healthcare directive. Find an estate attorney who specializes in serving younger families, suggests McGowan. “The process should be pretty simple, and it shouldn’t cost that much to do.”

Other considerations: Given the high cost of college tuition, it’s never too early to start setting aside money for your child’s education via a tax-favored vehicle such as a 529 college savings plan. Also review your auto insurance coverage, suggests Knox, as you may be eligible for a discount for being a parent, and/or if your driving habits will change as a stay-at-home parent.

As expectant parents, it can be daunting to have all these new responsibilities thrust upon you. A Certified Financial Planner™ (CFP®) professional can provide much-needed guidance and assistance in each of the aforementioned areas. To find one in your area, check out the Financial Planning Association’s national database at www.PlannerSearch.org.

 

October 2015 — This column is provided by the Financial Planning Association® (FPA®) of Northeastern New York, the principle professional organization for Certified Financial PlannerTM (CFP®) professionals. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Northeastern New York if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.