When Disaster Strikes: Moving Back toward Normal

Without question, a natural disaster can alter your life forever. Most important, of course, is doing all you can to insure your personal safety, along with that of your loved ones and friends. But even if you and your family survive the flood, storm, fire, or earthquake, the emotional trauma inflicted by the uncertainty and the damage or loss of your property can take a toll that lasts for years.

In previous articles on September 11th and September 18th, we’ve discussed the importance of taking steps that will allow you to begin rebuilding your finances as soon as possible following the disaster. We talked about securing your most important documents so that you can begin working effectively and as soon as possible with federal and state agencies, insurers, and others. Next, we looked at establishing a priority list for whom to contact first in order to get and stay on the road to recovery.

Now, let’s consider some of the longer-term implications of financial recovery from disaster. Once the initial shock has passed and you have had a chance to both take stock of your current situation and begin working with various entities to get re-established, it’s time to look a bit farther down the road and try to anticipate both the ways the disaster has changed your life and what you can do about it.

If you were disabled as a result of the disaster, you may be concerned about the possibilities of going back to your previous employment. You should know that the Americans with Disabilities Act (ADA) offers important protections to disabled persons who work for a company that employs fifteen or more. You may be able to ask your employer for a “reasonable accommodation” in order to resume your previous duties. In such a case, you may be able to go back to work as before. On the other hand, your disability may qualify you for Social Security and other benefits. You may need to consider whether going back to work or applying for and receiving benefits is more advantageous. Information about both benefits and “back-to-work” programs for disabled persons is available at this Social Security Administration webpage.

You may have other available sources of income, such as special disaster relief funds from federal, state, and local governments. Such funds, if you receive them, are usually not taxable. You may also be able to negotiate with your employer to receive an earned bonus early, or to work overtime in order to make up some lost income. If, on the other hand, the disaster forced your employer to close or lay off workers, you may qualify for state unemployment benefits while you look for a new job (these benefits are usually taxable). You may even be able to tap into your retirement plan. In the case of permanent disability, withdrawals are not penalized. It may also be possible to utilize cash value of life insurance policies to help tide you over until your income stabilizes.

Local housing authorities can assist renters who are having difficulty with payments, and if you own your home, you may be able to work out a mortgage forbearance agreement that will allow you to make reduced or no payments for a certain period of time. If you are concerned about working successfully with your mortgage lender, you may wish to review the information at the U.S. Department of Housing and Urban Development (HUD).

You may be able to find ways to reduce expenses, increase income, or both, as you construct your long-term recovery plan. If the disaster has taken you out of the workforce for some period of time, you may qualify for assistance with retraining. State employment offices offer programs for certain persons who are seeking to rejoin the workforce.

The University of Minnesota Extension service has developed a great overall resource for families and individuals seeking help for financial recovery from disaster, “Recovery after Disaster: The Family Financial Toolkit.” While this resource was developed initially for those living in Minnesota and North Dakota, it also offers many strategies that are non-state specific, including handy references to many federal agencies such as HUD, the Department of Labor, and others.

Most important of all, now–while you are on the road to recovery–is the time to make a plan for the next disaster. While we all hope that such events will never repeat themselves, one of the best things you can do for yourself and your family is to apply the steps and tactics we have outlined in this series of articles to being prepared. The best disaster preparedness plan is the one you never have to use. But if you do need it, it will be worth its weight in gold.

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Equifax Breach, Revisited: Four More Steps to Protect Yourself

On September 9th, I created a blog (What Should You Do about the Equifax Data Breach) and recommended that consumers who are concerned about the recent breach at Equifax (and more than 160 million of us should be concerned) should place a security freeze on their credit reports at Equifax, Experian, TransUnion, and Innovis, the major, worldwide credit reporting companies. This service is free, and it will help to prevent identity thieves and scam artists from opening new credit accounts under your name.

However, a freeze alone does not protect you from every threat posed by the Equifax fiasco. In addition to credit information, hackers also accessed Social Security numbers (SSN), dates of birth, and drivers license numbers. These data can expose you to other dangers besides fraudulent credit accounts. You should take the following four steps to protect yourself.

  1. Guard your Social Security benefits. If you are approaching age 62 go to “My Social Security” and create your account to help guard your benefits. Even if you don’t plan to collect anytime soon, having your legitimate account in place will keep a thief from doing it before you do and having your benefits sent to a fake account without your knowledge. Even if you’ve set up your account but haven’t visited the website recently, you should do so now, just to make sure everything looks as it should. Also, in June, the Social Security Administration instituted two-factor authentication; when you enter your username and password, the site will send a text to your mobile phone with a security code that you must enter. This prevents identity thieves from accessing the account, since they don’t have your phone to receive the code. If anything looks amiss, contact the Social Security Administration immediately.
  2. Protect your tax refund. Once they have your SSN, thieves can redirect your tax refunds to themselves. The best defense is a PIN from the Internal Revenue Service (IRS), which must be included with your return. However, the only way you can get a PIN is if you’ve previously had a fraudulent return filed in your name or if the IRS otherwise determines you’re an ID fraud victim or likely to become one. At present, the IRS hasn’t said whether those victimized by the Equifax breach will qualify for a PIN. But it’s a good idea to request one anyway by filing a Form 14039 Identity Theft Affidavit available at the Internal Revenue Service website.
  3. Make sure your health insurance benefits are covered. With some of the data exposed by the breach, fraudsters can steal your benefits from Medicare, Medicaid, or private health insurance by filing false claims in your name. You should get copies of your medical records from providers to establish a baseline that can then be used to root out fake claims. If your medical provider uses an online patient portal, you should log in and check it to make sure that you recognize all the providers listed and that the treatments shown were actually received by you.
  4. Secure your drivers license. Your state motor vehicle department can give you a copy of your driving record, usually for a fee of about $10. Make sure the record matches up with your recollections. To see if any bad checks have been passed using your drivers license number, request your free annual report from the three major check verification companies: ChexSystems, Certegy, and TeleCheck. If you find evidence of fraudulent use, file a police report and request that your state department of motor vehicles flag your license number, which will alert law enforcement of the possible fraudulent use by anyone with your license. Then, you should request a new license number.

For more information and resources, visit the Identity Theft Resource Center. And above all, be careful out there!

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When Disaster Strikes: Navigating Financial Recovery

In last week’s blog, we discussed the importance of having a plan for recovering from natural disaster. Whether you live on the Texas Gulf Coast, in Oklahoma’s “Tornado Alley,” in the San Francisco Bay area, in Florida, in the middle of timber country in Idaho, or anywhere in between, disaster can strike with very little notice. After your personal safety and that of your friends and loved ones, nothing is more important than dealing as successfully as possible with the financial damage that natural disaster inflicts upon your property and financial resources, whether it be from storm, fire, earthquake, or flood.

Last time, we listed the crucial documents that you’ll need in order to begin the recovery process. Securing and having on hand items like your Social Security number, birth certificates, and other primary personal documentation will give you a big leg up on working with insurance companies, federal agencies, law enforcement, and other corporate and governmental entities that are able to offer assistance as you begin the recovery process. Now, let’s consider some of the practical steps you can take in the aftermath of a natural disaster.

First, let’s discuss which agencies and other entities you should contact as soon as possible. The American Red Cross is always one of the first organizations to respond to any natural disaster, and especially if your home is too damaged to inhabit. Contacting them, either at their website or by calling the number of your local chapter, can help you obtain emergency housing and other necessary immediate assistance. If your community has been declared a federal disaster area, the Federal Emergency Management Agency (FEMA) can also help with emergency housing and even emergency cash assistance. Such financial assistance may also be obtained through state or local government agencies; it is usually nontaxable.

If possible, you should next secure your property. If authorities allow it, go home and gather any valuables and important documents that are retrievable. If you can, carry out temporary repairs and other measures to prevent further loss or damage. The Red Cross and FEMA may also be able to help you obtain materials to make these repairs. You will need to keep good records; your insurance company will likely reimburse you for any expenses you incur, as long as you can provide proper documentation.

Speaking of insurance companies, you should now notify your claims representative. At this time, you may wish to inquire whether your policy contains provisions for reimbursement of emergency housing costs, food, laundry, and other living expenses. Sometimes, the insurer will issue a check up front; other companies may require you to provide receipts for reimbursement. In either case, it is important for you to keep receipts for your expenses. Some of these reimbursements may be taxable, but proceeds used for repair or replacement are usually not.

Now it’s time to notify your creditors of your situation. If you are unable to live in your house, contact your utility companies and request that they halt billing until their services are available again. Ask other creditors for additional time to pay. In such circumstances, most creditors will work with you, especially if you call them before the payment due date. Prioritize communications with your mortgage holder, your vehicle lien holder (if applicable), and your insurer.

These initial steps will help you begin the process of getting back on your feet. In a future article, we’ll take a look at the longer-term implications of disaster recovery and how you can minimize the amount of time it takes to get back to a more normal routine.

NOTE: Many of the ideas in this article come from “Disaster Recovery: A Guide to Financial Issues,” published with the cooperation of the National Endowment for Financial Education, the American Institute of Certified Public Accountants Foundation, and the American Red Cross.

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When Disaster Strikes: Tips for Financial Recovery

The tragic images coming from the Texas Gulf Coast over the past few weeks and from Florida and the Caribbean over the past few days have surely reminded us all that natural disasters are no respecters of persons. In Houston, flood waters inundated neighborhoods filled with shotgun houses and exclusive suburban areas featuring million-dollar homes located on previously serene, wooded lots. Once the rains came, it made no difference: homes in both locations filled with water, driving the residents to rooftops, second stories, and, ultimately, to shelters holding thousands of evacuees.

How do you recover financially from a natural disaster like Hurricane Harvey and Hurricane Irma? How do you prepare for the next one? Perhaps you don’t live on the coast and you aren’t worried about hurricanes, but flash-flooding can occur far inland. And what about earthquakes, damaging hail, tornadoes, or wildfires, like the ones threatening California and the Northwest as these words are being written?

Anyone who owns property or has any type of financial assets needs a recovery plan for natural disaster. Over the next few weeks, we’ll be examining various aspects of natural disaster and looking at ways you can prepare yourself, your family, your property, and especially your financial infrastructure. While none of us can control the weather or the global environment, we can take measures to aid the quickest possible recovery from those cataclysmic events that none of us like to think about.

First, let’s think about what you’ll need as you begin the recovery process. In order to work as efficiently as possible with insurers, law enforcement, public safety officials, federal assistance personnel, and others, here is a list of some of the main documentation you’ll need:

  • Birth certificates
  • Death certificates, if applicable
  • Marriage certificate
  • Wills and Powers of Attorney (POAs), including medical POAs
  • Social Security cards
  • Medical records, including prescriptions
  • Insurance policies (life, health, disability, long-term care, auto, homeowner’s, if applicable)
  • Checking and savings account information
  • Retirement and brokerage account information
  • Recent pay stub
  • Recent utility bill
  • Vehicle titles and/or registration
  • Mortgage and/or deed documents
  • Safe deposit box information and key
  • Credit card information

Keep in mind, this is not an exhaustive list. You may have other documentation particular to your situation that is just as important as anything shown above. The point is, you need to have a collection place for these documents, and it needs to be able to survive a natural disaster. Ideally, you should be able to grab the container with all these papers and carry it with you as you are evacuating to a safe location. It is also possible that some of this information is stored in digital form. If so, are the data backed up on a server or other device that would survive local flooding, a major earthquake, or a fire? Is the information secured so that only authorized persons can access it? There are a number of cloud backup services that can help you make sure your most critical data are safe. Even if you must pay a small monthly service charge, the peace of mind that comes with knowing your critical documentation is safe and readily accessible is far more valuable.

In a future article, we’ll look at the immediate aftermath of a natural disaster: whom should you call first? What creditors should you prioritize, and which ones should you reach out to earliest? Are there sources for emergency cash assistance? Answering these questions will form the basis for your natural disaster financial recovery plan.

NOTE: Many of the ideas in this article come from “Disaster Recovery: A Guide to Financial Issues,” published with the cooperation of the National Endowment for Financial Education, the American Institute of Certified Public Accountants Foundation, and the American Red Cross, available and can be found on the web at the link above.

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What Should You Do about the Equifax Data Breach?

Many consumers were unnerved to learn that Equifax, the giant credit-reporting corporation, suffered a data breach between mid-May and July that exposed sensitive personal information for an estimated 143 million individuals. The information obtained by hackers included Social Security numbers, dates of birth, address histories, driver’s license numbers, and legal names, all of which are often used to commit identity theft and other types of fraud.

According to the Federal Trade Commission (FTC) website, anyone with a credit report is potentially a victim. The FTC website also provides recommended steps to take in order to find out if your information was exposed, along with remedial actions you can take, including a year of free credit report monitoring from Equifax. The site also offers several practical suggestions, including closer-than-usual monitoring of your credit card and bank accounts, early tax filing, and fraud alerts on your files.

One item that is raising many consumers’ hackles is a provision in the Terms of Service for Equifax’s TrustedID credit protection program–the service currently being offered for free–that requires customers to waive their right to participate in any class-action lawsuits that might arise in the future from the use of the TrustedID service. It is important to note that this provision would not apply to claims arising from the current cybersecurity incident, according to an online statement from Equifax. Nevertheless, many consumers are wary of agreeing in advance not to sue a company that has just admitted a data breach that could cost millions.

In addition to the steps recommended on the FTC identity theft website, you should also be suspicious of emails that purport to come from Equifax. The company is directly contacting only the 209,000 customers whose credit card information may have been compromised, and they are doing this via the US Postal Service, not email. Hackers will use “phishing” emails that look like genuine communications from Equifax in order to entice consumers to click on links connecting with malicious websites. Such emails should be deleted immediately without being opened.

Other practical steps, not only now, but in general, include checking your credit report regularly at the government-authorized site: AnnualCreditReport.com. This is a good idea, not only because of the recent breach, but because it is not unusual for errors to show up on your report. In fact, a 2014 study by the FTC found that about one in four consumer credit reports contains errors. Unless you’re checking it yourself, they’ll just stay there and potentially hurt your credit. Also, don’t be hasty about closing credit card accounts, especially those that you’ve had for a long time and that are in good standing. Doing that can actually hurt your score, because it can look negative for your credit history.

For consumers who do not agree with the legal waiver included in Equifax’s free TrustedID service, there is another alternative. Experian and TransUnion, the other two major credit-reporting firms, offer consumers the ability to put an alert on their accounts for 90 days. An alert on any of the services will cover all three companies, and it is free. For more information on placing a free fraud alert on your account, see the information on the FTC website.

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Does It Make Sense to File Early for Social Security?

It may seem strange to some that this question should even be posed. After all, the conventional wisdom, which most of us have heard over and over, is “The later the better; wait until you’re 70 if you can, to get the maximum monthly benefit.”

Certainly, there’s a reason why this is the conventional wisdom. After all, it is true that the longer you wait after becoming eligible to begin receiving Social Security payments (currently, age 62), the larger your monthly paycheck from the government.

On the other hand, for certain people, there can be compelling reasons to consider drawing Social Security as soon as they become eligible. Let’s take a look at some scenarios when it may make sense to file early.

  • You are in poor health. Life expectancy following retirement is probably the number-one variable that we must contend with when helping people plan for retirement. If your health is poor, filing earlier for Social Security benefits may be a wise choice. Even if you file at the earliest possible time, at age 62, you are still eligible to receive 75 percent of your full benefit, and that extra monthly payment can make your life much easier, especially if you have other assets with which to supplement your income. But before committing, you might wish to have a frank discussion with your physician. A 2015 study by Stanford University researchers indicated that two-thirds of retirees who claimed early actually had enough assets to be able to wait two years or more before beginning Social Security payments. If your health is not great but also not dire, it could still make sense for you to wait until age 64 or 65.
  • Your spouse is ten to twelve years older than you. In this situation, claiming early, especially if you have significantly lower earnings, can put you ahead in certain circumstances. According to Baylor University’s Bill Reichenstein, if, for example, you are a woman who is twelve years younger than your spouse, and he waits until age 70 to begin claiming benefits, you might consider claiming at age 62. It would take you until about age 78 (when your husband is 90) before the money you would have received by delaying your payment would exceed what you received by filing earlier. Given the time value of money, collecting for a longer period of time is better than waiting for the bigger payments. And if, as is statistically likely, your husband predeceases you, you’d be able to switch to a survivor benefit equal to his monthly payment.
  • You have qualifying dependent children. When you file, your qualifying dependent children may also qualify for payments. This one can be complicated, so do the math carefully, and you may also want to consult with a qualified advisor. But in some cases, this can be a win-win strategy.

In all these scenarios, of course, it is always best to seek the advice of a qualified financial professional who is familiar with your situation and other resources. Remember though: later isn’t always better.

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Should Couples Retire at the Same Time?

Most of us have heard the stories: the wife of many years whose husband has always been the breadwinner–but who is now retired and, for the first time in either of their lives, is home with his wife most of the time, instead of at work. Many of these women, accustomed to being able to do pretty much what they like during the day–whether housework, shopping, a hobby, or volunteer activities–must now contend with a mate who is in unfamiliar territory, struggling to redefine himself, and generally underfoot. And the same applies to the working wife with the stay-at-home husband.

Though the above scenario is often presented in a humorous light, it points to a serious question: What happens when couples enter retirement at the same time? Baby Boomers, who are now retiring in droves, are the first generation to feature a huge number of two-income households. What are the implications for these couples as they transition simultaneously from career to retirement? What will they do as they both try to adjust to the very different challenges and opportunities of their post-working years? Should they even attempt to make the transition together?

Many advisors suggest they should not. These experts point not only to the financial disadvantages of simultaneous retirement, but also to its emotional and marital complications.

In many situations, it can make great sense for one spouse to continue working after his or her partner retires. Financially, this can benefit the couple by allowing more time for the working spouse to contribute to Social Security, a pension plan, and a 401(k) or IRA. Especially for those whose family histories indicate a probability of longevity, accumulating those extra assets can go a long way toward assuring greater comfort in the later years. Also, by working longer, the other spouse will increase the amount of his or her Social Security benefit upon leaving the workforce. Another financial benefit is that the working spouse can continue employer-sponsored health coverage that also includes the other spouse. Especially when the retired spouse does not yet qualify for Medicare, this can save hundreds of dollars per year that would otherwise have to be spent for obtaining individual coverage.

Emotionally, retirement can present steep challenges. For someone who has spent years in a career, retirement often occasions serious questions about self-identity and personal significance. And if both partners are undergoing this process of redefinition at the same time, major stress can be placed on the marriage. This can be particularly true of women, many of whom put careers on hold to raise children, then re-entered the workforce with renewed determination and ambition. Additionally, consider the adjustment needed between two people who have become accustomed to being active in their own individual spheres and must now figure out how to spend their time together, without the stimulation and sense of purpose afforded by work.

For all these reasons, it can make very good sense for couples to stagger their retirements. In this way, one partner can make the financial and emotional adjustments to a new lifestyle while still enjoying the support of the other, who remains anchored by familiar routines, surroundings, and income.

Certainly, togetherness is vital for the health of any marriage. But, contrary to Mae West’s famous dictum, in retirement, an excess of togetherness may actually be too much of a good thing.

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Tax-Savings Tips for the Self-Employed

Many of our clients are truly savvy individuals who have a firm grasp on not only the tax tips that follow, but on even more complex tax strategies that are often advantageous for larger businesses with millions in sales and dozens or even hundreds of employees.

However, such a successful business owner may have a child, a nephew or niece, or a young person that they have mentored who is launching a business as a solo entrepreneur. You may possibly know someone who, after years of working for someone else, has decided to strike out on her own. These simple tax-savings ideas, while probably “old hat” to some, may be eye-opening for others who are less experienced. And besides, a little review of fundamentals never hurt anybody! In that spirit, then, consider these basic tax tips for self-employed individuals.

Self-Employment Tax Deduction: While it’s certainly not enjoyable to pay extra taxes for the privilege of being your own boss, the tax code does allow you to deduct half of the employer portion of your self-employment tax as a business expense, thus reducing the amount of business income subject to ordinary income tax.

Home Office Deduction: Many small business owners do at least some of their business-related work at home, and if they do this in a space specifically set aside for the purpose, they may qualify to deduct certain costs as a business expense. The space must be a dedicated, enclosed space—in other words, a table in the corner of the dining room or bedroom usually won’t qualify—and it must be used regularly for the conduct of the business. If you qualify, you can deduct a portion of your utilities, and, depending on whether you own or rent, a percentage of home mortgage interest, depreciation, homeowner’s insurance, property taxes, maintenance costs, and rent, based on the square footage of the space as a percentage of the total square footage of your home. You will need to keep careful records, usually including a diagram of the space, with measurements.

Business Meals: If you are traveling for business or entertaining a client or prospective client, you may deduct half of the actual cost of the meal. It cannot be lavish, and the purpose of the meal and any guests must be clearly documented.

Business Travel: In order to be deductible, business travel must last longer than a typical workday, must involve the need for sleep or rest (overnight stay), and must take place outside the “home area” of the business (you probably shouldn’t try to deduct the cost of an in-town “retreat” as a business travel expense). The purpose for the travel must be established ahead of time. Documented lodging and meal expenses may also be included.

Personal Car Mileage: If you use a personal vehicle for business-related purposes, the mileage is deductible at the standard rate established each year by the IRS. Keep daily records of miles traveled and the related business purpose. Note that your commute to and from the office would not usually be allowed as business mileage.

And whether you are just starting your business or are a veteran business owner, be sure to consult your CPA to discuss tax strategies that are appropriate for you.

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North Korea and Your Investment Strategy

Should investors sell due to the tensions with North Korea? The short answer is, “Probably not.”

The longer answer has to do with the broader global and military context surrounding the recent well-publicized shouting match between North Korean dictator Kim Jong Un and President Donald Trump. While the latest headlines can make people nervous–and while we should certainly not blithely disregard the serious consequences of a miscalculation on either side–many experts do not believe that the fierce rhetoric of the two leaders indicates an imminent nuclear conflagration.

First, according to the Washington Post and other sources, the US military does not appear to be taking any of the preparatory steps that would normally precede a decisive military incursion. No US Navy carrier groups are being ordered to positions near North Korea, for example. Further, the US State Department has taken no measures to evacuate personnel from South Korea, which would almost certainly be on the “first targets” list for any strike ordered by Pyongyang. So, while the tough talk between the two heads of state may be unsettling and probably not conducive to productive discussions between the nations, it does not seem that it is time to head for the bomb shelters just yet.

Meanwhile, the US financial markets continue to bump against new highs. The economy continues its steady–if not spectacular–growth, and most companies continue to report earnings at least somewhat higher than they had forecast.

“But,” someone might say, “isn’t that all the more reason to pull back out of the market? Shouldn’t we take some profits and wait to see how things play out between Washington and Pyongyang?”

Here again, the best answer is “probably not.” Trying to time the market has been proven, by study after study, to be the very best way to miss important upside swings in value. Is it possible that hostile rhetoric or perceived threats could cause some panic selling? Yes, but many analysts would regard these as buying opportunities. There have been many serious world events that have pulled the markets down–9/11 being perhaps the most serious recent example. But even in that case, those who stayed in the market through the subsequent steep drop and slow recovery still achieved strong gains.

If you are feeling particularly vulnerable due to equity exposure in the current climate, by all means, speak to your financial advisor. Depending on your situation, it is possible that some portfolio rebalancing and restructuring could be helpful. But selling due only to ominous headlines is not a financial strategy; it is an emotional response to a perceived threat–in this case, one that has not yet materialized. Such emotionally driven decisions hardly ever bode well for your long-term financial well being.

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Five Retirement Savings Habits

When it comes to saving for retirement, sooner is always better. But even if you’re already well into your career, it’s not too late to form some useful habits. Let’s take a look at five very important habits everyone should consider to get on the road to a more financially secure retirement.

  1. Have a Spending Plan, and Stick to It: Remember that line your middle school teachers and parents used to pull? “Failing to plan is planning to fail.” Well, as annoying as it is to admit, it’s really true! Many people resist forming a spending plan because they perceive it as restrictive. However, the opposite is really true; when you have a plan, you gain a sense of freedom. You don’t have to agonize over a purchase decision, because, as long as you stick with the plan, you have the freedom of knowing it’s okay. Another benefit of having a plan is that it is excellent training for living in retirement, when most of us will be operating on a smaller budget. The discipline of budgeting teaches us to know the limits of our resources and allocate accordingly.
  2. Utilize Employer Matching: Many companies will match their employees’ contributions to certain types of savings and retirement plans. If you are fortunate enough to work for one of these companies, you should seriously consider contributing up to the maximum your employer will match. Think of it as doubling your money–immediately. And over the years between now and retirement, the compounding effect on that “free” money can add significantly to your retirement bottom line.
  3. Rollovers Are Your Friend(s): This is especially important to remember in the era of frequent job changes. Very few who have entered the workforce in the last ten years or so can realistically expect to work for the same firm for their entire career. We change jobs more frequently, which also means that many people forget all about the 401(k) they had at their previous place of employment. The result is either small accounts scattered all over the place–which makes it much more difficult to assess your assets and investment options–or simply cashing in the plan when you leave the company, which reduces the amount you’ll have in your retirement fund when you really need it. Instead, utilize rollovers to consolidate your accounts and retain the power of compounding on a tax-free basis.
  4. Know Your Options: There is no one-size-fits-all retirement strategy. Depending on your age, time until retirement, asset mix, and other variables, you may have a number of viable choices for both the timing and the funding of your retirement. The more you know, the better your decision.
  5. Start Now: This is the most important hint: no plan will help you until you start using it. The central, crucial factor in retirement planning is time. The earlier you start, the better your chances of enjoying a comfortable retirement lifestyle.

If you have a young person in your life, encourage them to implement these five habits now. They will be thanking you when they retire.

And if you have questions on these five habits or other wealth management topics, contact your financial advisor to discuss them with him or her.

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