5 Fall Money Maintenance Check List Items
With the dog-days of summer behind, you may be grinding through your fall home maintenance checklist -which may include important tasks such as inspecting your roof, gutters, driveway, outlets, smoke detectors, water heater, major appliances, pool and backyard seasonal maintenance items.
With a full quarter left in the year, there is still plenty of time to also get your home fall money maintenance tasks completed as well. Don’t put off financial matters today that may just end up on your next New Year’s Resolution checklist.
As stated in the book Millionaire Next door, “a great offense and poor defense translate into under accumulation of wealth.” In today’s busy world, don’t procrastinate with your financial life.
The following 5 items top of our fall 2015 money maintenance check-list strategies:
1. Big Ticket Purchases: Are you mulling-over the idea of purchasing a new home, investment property, car or small business venture? Have you been thinking about refinancing your current mortgage, high rate credit cards, medical bills or college loans to a lower-rate payment?
We are telling our clients that there is no better time than the present to take action and “lock-in” low interest rates on big ticket items. You may end up saving yourself a thousand dollars a year or more in debt payments. With the Fed’s goal to start hiking interest rates for the first time in 9 years, don’t be penny wise- and a pound foolish with your liabilities.
2. Tax Withholdings: Are you one of those folks that gets immense pleasure in receiving a big-fat tax refund in the spring – only to blow it on a vacation or shopping spree? This is one of my biggest pet-peeves. To Uncle Sam, you should neither a borrower nor a lender be.
We encourage our clients to review their total employer Federal Tax withholdings for the year against their expected annual tax liability. If you estimate you may be overpaying your Federal Income Taxes by over $500, consider to increase the number of personal allowances on your W-4 Tax form to lower your payments.
If you have a short term emergency or unemployment situation, you can’t just call up the Fed and ask for your money back early. Once you fix this situation, you can then dedicate your new “found” cash from each paycheck to whittle down your debts, make additional mortgage payments or increase your retirement savings and cash reserves, rather than provide Uncle Sam an interest free loan.
3. Open Enrollment: While you probably are not as excited as your HR director about your employer fall open-enrollment registration, you have a very short window of opportunity (typically the month of November) to add-to-or modify- your existing work-place benefits selections. We encourage our clients this month to contact their employer’s human resource department (or check on-line) to get the skinny on any new enrollment options or to note any changes to their existing benefits.
Do not leave significant tax-advantaged benefits on the table that may benefit you (and your family) from contributing to your health savings account or employer retirement savings account. Make sure you are enrolled and taking full advantage of your employer’s 401(K) or 403(B) plan where you may be eligible to receive a free company “match” on up to 3% -4% of your gross income. These (before tax) savings items could save you a couple thousand dollars per year on your tax return.
4. Portfolio Rebalancing: While you may have successfully socked-away money for your retirement inside and outside your 401K plan, when is the last time you checked and adjusted your investment allocations? Not revising and rebalancing your portfolio can be as catastrophic to your financial health as not periodically having your teeth cleaned by your dentist. We tell our clients that investing should not be a “set it and forget it” approach, especially in today’s turbulent stock market and post-recession economy.
Your portfolio’s asset allocation can “drift” away from your initial target allocation, just based on market performance over time. The goal of rebalancing is to reposition your current investments “back in line” to your originally planned asset allocation. For example, with the major U.S. market indices up greatly year over year since 2009, your (target) balanced 60/40 stock-to-bond “moderate-risk” portfolio may now have closer to 65% in stocks and 35% in bonds.
You can fix your allocation by selling investments of an asset class that is overweight on the upside (such as stocks) and using the proceeds to buy investments in an asset class that is underweight and down (such as bonds.) In essence, rebalancing is a form of “selling high and buying low.”
5. Career Assessment: Many companies today are aggressively belt-tightening, downsizing, restructuring and completing mergers and acquisitions. We are telling our boomer clients nearing retirement that now would be an opportune time to complete a career reassessment and a resume makeover. Take control of your own financial future and “skate to where the puck is going to be.” Note that 48% of current retirees exited the labor force earlier than they had planned to as a result of downsizing by an employer or health issues. (source: The Wharton School, 2014).
Many boomers are “reinventing themselves” and starting a second career before they even retire. Whether you are a boomer in (or nearing) retirement in your 50’s or 60’s, be aware that professional reinvention is not just for young people.
You may not choose to sit around for the next 35+ year phase of your life sitting in a rocking chair. It is noted in the article “Older Americans Shun Retirement for Startups” (Bloomberg, 2013) that 25% of boomers are seriously exploring startups as an option. “These are highly educated people that were laid off in the last downturn and realize those jobs are not coming back.”
For those less entrepreneurial minded, the article “Retirees Keep One Foot In The Workforce” (NBC NEWS 2014) notes to “Go to where the jobs are. You’re not reinventing yourself, you’re redeploying your skills.” The semiretired should look to industries that are ramping up, specifically healthcare, technology and nonprofits.
For more information on our firm or to get in touch with Jon Ulin, CFP®, please call us at (561) 210-7887 or email jon.ulin@ulinwealth.com. Get Started Today.
You cannot invest directly in an index. Past performance is no guarantee of future returns. Diversification does not ensure a profit or guarantee against loss.
The information given herein is taken from sources that IFP Advisors, LLC, dba Independent Financial Partners (IFP), IFP Securities LLC, dba Independent Financial Partners (IFP), and its advisors believe to be reliable, but it is not guaranteed by us as to accuracy or completeness. This is for informational purposes only and in no event should be construed as an offer to sell or solicitation of an offer to buy any securities or products. Please consult your tax and/or legal advisor before implementing any tax and/or legal related strategies mentioned in this publication as IFP does not provide tax and/or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors. This report may not be reproduced, distributed, or published by any person for any purpose without Ulin & Co. Wealth Management’s or IFP’s express prior written consent.
