You know you’ve been doing something for a long time when a colleague describes you as an “industry veteran.” That’s the way Will Hepburn described me to his clients last week. And yes, it made me aware that I did start as an advisor in 1992 and have been an active investor since 1984.
Obviously, 2020 has been one, if not the, most challenging years we’ve faced in a long time. During these challenging times, I believe we learn the most about ourselves and what we truly value. With that knowledge, we can more become more effective and efficient in managing our finances.
You can still end 2020 strong. How? I’ve listed some ideas below, which you might wish to review and take action on before January 1, 2021.
- Have a signed and updated estate plan, including a will, power of attorney, and health directives. Last week, a client contacted me to say that he and his wife had completed and signed these documents. I love getting those calls from families, especially those with minor-aged children! If you and your family don’t have these documents, I suggest setting a date to get this done before the end of the year. A basic estate plan can be easily accomplished in 30 days, as many individuals and families do not need complex estate planning. We can suggest resources if you are unsure of where to start.
- Review what, if any, life insurance policies you have or might need. Life insurance can be wonderful financial protection for your loved ones who depend on you financially. It can also give your family the financial means to grieve and get through a difficult loss. Having the right amount (death benefit) and type (employer-based, term or permanent) is critical to a family when faced with losing a loved one. If you’re unsure about any of this, give us a call.
- Review and fully fund important financial aspects of your life, especially retirement. I remind people that while you can finance many things like an education, a house or a car, you can’t “finance” your retirement. Living in retirement takes financial resources. Regardless of your age or how many more years you expect to work, maximizing what you are saving and investing for your future can be a smart move. If you have a retirement plan through work, such as a 401k or 403b, are you funding it as much as you can? If your employer has a pension plan (like TRS for Texas school teachers), state legislation may not allow you to “add” to those types of plans, but you could be eligible to fund a 403b, Roth 403b, IRA or Roth IRA. If you already have these accounts, consider making maximum allowable contributions to these plans. If you are unsure, let us know. It’s our job to keep on top of the current rules.
- If you have debt: student loans, credit cards, or line of credit, take the next 60 days to make a plan to pay these debts off. These types of debts can have a tremendous drag your finances, today and especially in the future. It can be helpful to put this information together on a spreadsheet, or at least have your debt information all written out. Knowing the amount owed, the interest rate being charged, and the status (current or delinquent) can help you formulate a solid plan to pay off these debts and lighten your financial burden. Wouldn’t that be a good feeling?
With the elections and the end of the year fast approaching, I hope you will take some time to review these items. Making a decision and taking action is much better than delaying, especially when these decisions can help both you and your loved ones, now and in the future. And that’s true no matter what year it is!
Shadowridge Asset Management, LLC does not offer tax planning or legal services, but may provide references to accounting, tax services or legal providers. They may also work with your attorney or independent tax or legal advisor.