How Do You Survive The Inevitable Storms of Life?
Over
the last thirty years of being a CERTIFIED FINANCIAL PLANNER ™, I have helped
many clients survive a crisis in their lives. Here are some tips I recommend.
Whether the crisis is an illness, loss of a job or the
death of a spouse or loved one, there are things you can do to minimize the
trauma for you and your loved ones. Here are a few tips that can help:
·
Create an advisory board and make
sure your loved ones know who is on the board.
This board could include your CERTIFIED FINANCIAL PLANNER
™, your Lawyer and your tax advisor. Make
sure your spouse meets with each of them periodically.
·
Review who has what job
in your estate planning and make sure they are still the right people.
· Review
your Estate documents with your Attorney at least every 5 years and make sure
you follow your Attorney’s advice on Beneficiary assignments.
· Review
all of your insurance coverage annually to make sure the pricing is competitive
and you have adequate coverage.
· Get
Disability Insurance if your employer does not provide it.
If your employer does provide it, thank them! It is hard to get it privately
and it can be expensive.
· If
you own a business, please do not wing it.
If you have partners, get a Buy sell Agreement and fund it so that in the event
of a disability or a death, it pays out the money. I have assisted two widows
in this process so far. It can be ugly without a funded Buy Sell Agreement.
· If
you own a business and have no partners, buy life insurance to protect your
family. Your business will probably be worthless unless your
family can sell it within 30 days.
· Build
a liquid reserve fund for emergencies. They will happen.
It can take months to find a job if you lose one. If you lose one during an
economic downturn, your investments may be worth considerably less at that
time. It is a bad idea to rely solely on
a 401(k) plan or IRA at that time. Anything you take out will be subject to tax
(and penalties if you are under 59.5 and do not qualify for one of the
exceptions).
· Accept
that denial is not a planning strategy. Long Term Care is
an inevitable part of aging. Be realistic and consider getting Long Term Care
Insurance.
· Only
invest in stock related investments if you plan to keep invested for ten years
or more. If you need the money back in the next
few years- stay in an online savings account instead. You have to be prepared
to ride out an extended (3 years or more) downturn without selling.
I always tell my clients to plan for the worst but
hope for the best. Following some of these tips can help you, and your loved
ones, weather the inevitable storm.
If
you have additional questions, please feel free to call my office at
201-843-0044 or check out our website at:
