Personal Finance Top 7 Fall Money Maintenance Check List Items

Top 7 Fall Money Maintenance Check List Items

With the dog days of summer behind, you may be grinding through your fall home and auto maintenance checklist items -which may include inspecting and or fixing your roof, gutters, driveway, outlets, smoke detectors, water heater, air conditioner, landscaping, pool, car tires and more.

With a few months 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.

Developing money-smart routines with your financial habits can help to reduce stress and increase your bottom line over time. 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 7 items top of our fall 2017 money maintenance check-list:

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?

Before year-end, consider now is a great time to take action and “lock-in” low-interest rates on big-ticket items as a top money maintenance item. You may end up saving yourself a thousand dollars a year or more in debt payments. For example, the 30-year fixed mortgage rate is historically low today at 3.8%. With the Fed’s continued goal to hike interest rates, don’t be penny wise- and a pound foolish with your liabilities.

2. 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 compensation. These (before tax) savings items could save you a couple thousand dollars per year on your tax return.

3. 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 as we are about to hit the 9th anniversary of the current bull market on March 9th, 2018 and are more than half-way through the current economic cycle.

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 80% in stocks and 20% in bonds.

Ignoring your portfolio risk allocation is as insane as ignoring your blood pressure if it were up 20 points too high.

You can fix and adjust 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.”

4. Insurance Review

Protecting your most important assets, health, life and family is critical when creating a solid personal financial plan. The fourth quarter would be a good time to actually open up all your insurance receipts that you get in the mail and review your coverage, premiums and out-of-pocket deductibles for each type of coverage.

Checking your home-owner’s insurance policy 24 hours before a Category-5 hurricane is about to hit your home is the example of poor planning.

Many people are not aware if the level of coverage they have for different types of insurance is suitable to help transfer risk and protect their health, home, car, life and income (disability insurance). As you age (or your life situation changes), you may need to modify existing policies or add new types of coverage, such as long-term care insurance.

Five pointless insurance policies you may want to skip could include flight insurance, insurance on kids, accidental death insurance, mortgage life insurance and disease insurance.

5. Estate Review

Many people we meet with have either not completed their estate plan or not updated it in 10+ years. Take some time out around the holidays on your day off to discuss with your attorney and significant other whether you need to complete or update any parts of your will, trust or critical estate planning documents.

As we discuss with our clients, estate planning is about much more than just about creating a will and considering your eventual transfer of assets. It is a key part of the financial planning process to help maintain and protect your wealth, family and legacy before and after your retirement, in any and all circumstances.

What goes into a legacy plan? Besides estate planning basics, it can include an ethical will, in which you explain your beliefs and give life lessons to your heirs. It can provide instructions for the preservation of family history documents and even your “digital” assets and social media accounts. It may integrate a family business succession plan, an education fund, or a foundation to gift charities and other nonprofit groups.

6. 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.  This is one of our many tax planning strategies we cover for our clients.

7. Career Assessment

Complete a career reassessment and a resume makeover. 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 from personal health issues. (source: The Wharton School, 2015).

Many boomers are “reinventing themselves” and starting a second career before they even retire. Whether you are a boomer 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. Plus you may need to “sock away” a few more dollars for your retirement, even through your 60’s and 70’s.

It is noted in the article “Older Americans Shun Retirement for Startups” (Bloomberg, 2013) that 25% of boomers are seriously exploring startups and small business ventures 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 request a complimentary consultation please email or call (561) 210-7887 today.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.
All indices are unmanaged and may not be invested into directly.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Loss of principal may occur.

No strategy assures a profit or protects against a loss. Investing involves risks, including possible loss of principal.

This information on Federal income taxes is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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