By Roberta L. Nestor
There are probably hundreds of things you mean to do or want to accomplish but the reality is, it’s difficult to find the time. Time is a commodity these days and maximizing it takes commitment and discipline. It is also true with financial planning, there are many things you want to have done, but somehow they always get put on the back burner. Planning for your financial future takes commitment and discipline to stick with the plan. Before meeting with our clients, we tend to ask the same question, “Is there anything specific you would like to discuss?”
As a matter of fact, I have been meaning to:
“Get my will updated.” Good! Good that you have one and even better that you recognize the need to have it reviewed periodically. Life events such as marriage, divorce, new grandchildren, death in the family or perhaps illness are all triggers to have your will reviewed. If you haven’t had any recent life changes, you still may want to consider a review of your will and other living documents. Make sure your designated Power of Attorney or Health Care Representative is still your best choices and that the language used on these documents is still valid. Years ago you might have been able to get away with language like, “any children born out of said marriage” or “don’t keep me alive by machines”, but not in today’s legal systems.
“Open a ROTH account.” What are you waiting for? First, contact your financial advisor and make sure you are eligible (there are income limits) then have them put together the paperwork for you. Most investment companies have lowered minimum deposit levels for retirement accounts and they can also set it up for you so that contributions are drawn off of your checking account automatically each month. Maybe your 401k plan has a ROTH option? ROTH’s tax free accumulation and tax free access can be extremely powerful in retirement giving you a stream of tax free income.
“Increase my 401k contributions.” Unfortunately this happens to most of us, it is easy to be complacent when something happens automatically and equally easy to forget about. Whether you have a 403b, 401k or a 457 plan, make a call or get online and find out when you can make changes to your contribution level. Find out if there is an option to have automatic increases of say 1%, 2% or 3% a year (especially if you are not maximizing contributions). For 2015 the elective deferral limit for employees who contribute in 401k, 403b and most 457 plans has increased from $17,500 to $18,000. The catch-up provision for employees over age 50 has increased from $5,500 to $6,000.
“Consolidate my investments.” Having several old 401ks, a few IRAs, a brokerage account here or there and a ROTH all in different places means excess mail, tax reporting and it makes it difficult to look at the whole picture. You can still have a diversified portfolio, but perhaps one that makes more sense when placed with an advisor who can look at everything you have. It is difficult to assess risk, asset allocation and retirement planning when you have things scattered.
Start 2015 in the right direction and instead of making these a part of a New Year’s Resolution, make a list of those things you have been meaning to do and tackle them one at a time. Set a goal to do just one of these each calendar quarter and your financial house will be much sounder by the end of the year.
Roberta L. Nestor is a financial advisor practicing at 491 New Haven Avenue in Milford, CT offering retirement, long term care, investment and tax planning services. She also offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network – a member FINRA/SIPC and a Registered Investment Adviser. Fixed insurance products offered through Nestor Financial Network are separate and unrelated to Commonwealth. Commonwealth Financial Network or Nestor Financial Network does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Roberta can be reached at Nestor Financial Network, 203-876-8066 or firstname.lastname@example.org.