With 2018 coming to end I thought it would be helpful to create a list of a few of the important items you should consider as 2019 begins. This is not an all-encompassing list, but rather some timely items, as well as a few we tend to ignore.

Check your beneficiaries:

I continually come across clients who have people listed as their beneficiaries who they would no longer want to receive assets. This could be a newly married individual who still has their parents, or a sibling, listed as their beneficiary. It may also be a parent who has failed to add newly born children as contingent beneficiaries. A beneficiary designation is a simple, yet very powerful, estate planning tool that is free but is often not given the attention it deserves in your financial plan.

Evaluate your banking relationship:

Rarely do I meet with a client who enjoys their banking relationship. This may be because of fees, customer service or negative publicity for their bank. The main challenge is it can be a lot of work to change your banking relationship. You likely have your paycheck directly deposited into your bank account and you also very likely have many of your bills on auto-pay from your bank account. Switching these over can be a fair amount of work but it’s easy to argue that it is well worth it if you find a bank with lower fees or you can earn more interest on your savings. Here is a great link with a few steps to make this process a little more manageable.

Bankrate on Moving Accounts

Review your insurance:

Insurance is a dirty word to most clients I meet with. To them it is an expense with a payout they never hope to need. However, they all realize the importance of protecting assets in their life. The most commonly ignored insurance I come across is your homeowner’s insurance. The past 5+ years we’ve seen a steady increase in the valuation of homes and with that a policy you’ve taken out prior to that growth may not cover the true value of your home. Imagine a scenario where your $400,000 home burns down and you learn your insurance will cover $300,000 to rebuild. That can be a catastrophic financial event in your life and it could have been avoided with an annual review with your insurance agent. I would also suggest you periodically review your life, disability and car insurance to make sure they will cover what you expect they need to cover.

Bump up your savings:

A simple way to increase your retirement savings is to increase your deferral every January. In most cases you likely received an inflationary increase to your wages of 1-2% so I suggest to my clients that they increase their deferrals by the same amount to enhance their retirement assets. If you do this before you receive the first 2019 paycheck you won’t feel the difference in your cash-flow because you basically will have the same deposit as in 2019. Here is a 401k calculator so you can see for yourself the difference that increasing your deferrals will make over time.

Raymond James Calculator

Share your financial plan:

My wife and I were talking the other day and she reminded me she doesn’t know how to access many of our accounts in the event I died or was incapacitated. She has trusted me to put together a strong financial plan for our family (which I have!) but with that trust comes the fact that I handle 99% of our financial affairs. If I’m not here to log into our accounts or call our CPA to complete our taxes she will have a real hard time managing our finances. This often comes at the absolutely worst time, when you’ve lost a spouse or something tragic has happened in your family. This scenario is true with many of the families I work with because it’s natural for one member of the family to handle the finances. I highly recommend everyone in the family has a basic understanding of their financial situation and without a doubt knows how to access all pertinent information. Here are a couple items to help with this.

  • Password keeper:  Find an app or software program that will safely keep all log in information but is accessible by those who could need to gain information.
  • Safe:  For documents that are not held electronically I always recommend a safe. Make sure that those who may need to access the contents actually know where to find the key!
  • Financial professional:  Make sure that your financial advisor, accountant and/or attorney understands your situation and will be there to work you through this process if an unfortunate event where to happen. That is what you pay them for!

I’m sure I could add more items but as I sat down to prepare for this article, I wanted to share with you the 5 items that I believe are most important heading into the new year.

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