First Job

Save for retirement – invest

TAX PLANNING & PROJECTIONS

CREATE BUDGET

MAXIMIZE EMPLOYER BENEFITS

START EMERGENCY FUND

BUILD CREDIT

Buy a Home

MORTGAGE – TAX PLANNING & PROJECTIONS

When buying your first home, consider your long-term goals, the credit score of both you and your spouse, and the process of either paying for a home in cash or taking out a mortgage, which has certain tax benefits. At this time you’ll want to run a tax projection to make any adjustments. (Click here to learn why tax projections are important.)

LIFE INSURANCE

By having life insurance in place, you can ensure that your family and/or your business has a secure financial future in the event that something happens to you. Not only can life insurance provide a financial safety net for your family or business partners, but it can also be used as a retirement planning investment strategy. (Click here to learn 6 ways to utilize life insurance benefits.)

Career Changes

Save for retirement – invest

TAX PLANNING & PROJECTIONS

MANAGE FINANCIALS

START A BUSINESS

Starting a business requires multiple action items that need your attention, be it determining your tax entity or setting up a business bank account. Completing these steps correctly can save you thousands of dollars in the long run. (Click here for the new business checklist.)

GROW YOUR BUSINESS

As your business evolves and expands, you may want to consider implementing accounting software such as QuickBooks Online, completing periodic tax projections, filing 1099s, and purchasing a retirement plan for yourself or your employees. (Click here for details on how we can help you grow.)

Divorce

tax implications & planning

In order to capitalize on tax deductions, you may need to change your filing status, deduct alimony payments, claim child tax credits, etc. (Click here to learn how divorce adds complexity to a tax return.)

UPDATE FINANCIAL PLAN & ACCOUNTS

Create a revised budget with your single income, determine who will pay what on credit cards if you have shared debt, change beneficiary designations on necessary accounts, etc. For those with joint investment or retirement accounts, you’ll want to divide riskier investments based on differing risk tolerances as well as decide if it’s more cost-effective to liquidate your accounts rather than paying transfer or withdrawal costs. (Click here to learn about updating beneficiaries.)

UPDATE WILL – LEGAL

Adjust the beneficiaries on your accounts to include new family members if you decide to remarry someone with children. 

Career Changes

SELL/CLOSE YOUR BUSINESS

2-4 Years Before Retirement

Annual Retirement Plan Review

REVIEW ESTATE PLAN

Reviewing your estate plan at this stage will allow you to adjust your will, designate guardians for any minor children, review your trust strategies, and take into consideration any new tax regulations. You’ll also want to consider making any charitable contributions or gifts to minimize tax liability.

UPDATE FAMILY BINDER

Discuss Healthcare Options

After reviewing your healthcare options, you’ll now want to discuss any prescription drug and disability coverage you may need as well as take an in-depth look at costs. You’ll also want to examine your taxable income a minimum of 2 years prior to enrolling in Medicare to avoid additional IRMAA fees. (Click here to learn ‘what is IRMAA’).

Discuss Optional Tax Strategies

Diversify how and when your retirement fund will be taxed by considering an HSA, implementing a Roth conversion, investing in a brokerage account, and other options. (Click here for 12 Roth IRA conversion facts.)

Leave Career

Implement Retirement Plan

While in the distribution phase, you’ll implement the “Now, Soon, Later” plan you worked with your advisor to cultivate as well as have an annual review completed to make sure you’re utilizing your plan wisely. Your spending may change in retirement due to increased medical bills, adjustments made to your estate plan to account for new loved ones you want to leave wealth to, and other developing factors. (Click here to learn more about the bucket approach retirement strategy.)

Manage Tax Strategies

Work with your advisor to employ strategies such as withdrawing from investments in tax-deferred or tax-free accounts, taking advantage of RMDs, and tapping interest and dividends while leaving your original investments alone. (Click here to learn more about the power of Roth conversions to reduce RMDs.)

Implement Healtchare Program

Utilize the healcare program you’ve outlined. However, make sure to plan for rising healthcare costs and potential needs for long-term care. Then, you can adjust as your plan as necessary.

Maintain Cash

Maintain one year of expenses in cash and take advantage of predictable income. For discretionary expenses consider paying with stock dividends, distributions from mutual funds, and proceeds from selling investments.

Social Security

You can start drawing from Social Security at 62, but you won’t receive full benefits until full retirement age. Delaying your benefits from your retirement age to age 70 can also increase your benefit amount. (Click here to learn more in these Social Security videos.)

Medicare

You’ll want to have reviewed your Medicare options and signed up during the 7-month initial enrollment period 3 months before turning 65. Before enrolling, your advisor can examine your taxable income from the past 2 years of tax returns to help you avoid IRMAA fees. Remember that once you choose a Medicare plan, you can change it as you age. (Click here to learn more about how to avoid IRMAA fees.)

Retirement Maintenance

Manage & Review Retirement Plan

When inflation and unexpected changes in your lifestyle occur, your spending habits will drastically change. For this reason, you should meet with your advisor to adjust your balance sheet and review your budget and portfolio annually. (Click here for a list of elements to review annually).

Manage Tax Strategies

In order to stretch out your retirement savings, employ tax-efficient strategies like taking your RMDS, tapping interest and dividends, collecting principal from maturing bonds and CDS, and selling any other assets if necessary. (Click here to learn the about power of Roth conversions to reduce RMDs.)

Legacy planning & wealth transfer

When discussing legacy planning and wealth transfer, it is important to consider the financial implications that will come to those who receive your generosity. Considering the most tax-efficient methods should be at the forefront of these discussions in order to maximize your gift and alleviate future stress. (Click here to learn about tax-efficient wealth transfer methods.)

Review Estate Plan

Reviewing your estate plan every three years will allow you to adjust your will, designate guardians for any minor children, review your trust strategies, and take into consideration any new tax regulations. You’ll also want to consider making any charitable contributions or gifts to minimize tax. (Click here for elements needed to update your estate plan.)

Update Family Binder

At least every other year, update your family binder with add new account information, passwords, and other important information. (Click here for elements needed to update your family binder.)

Review Healthcare

Make sure you’re accounting for additional costs of over-the-counter medications as well as dental and long-term care. Adjust your Medicare plan as necessary. 

Review Insurances

If you travel a lot in retirement, consider the effect this has on homeowners and auto insurance. Make sure to review your plans to account for living in multiple places throughout the year. Review your long-term health insurance if you or your spouse need full-time nursing home care, as this is not covered by health insurance. 

Maintain Cash

Always maintain one year of cash to cover a full year of expenses. This can be held in a liquid account such as an interest-bearing bank account, money market fund, or short-term CD. Then, you use the money in this account and replenish it with portfolio funds. 

Death

Account changes

tax implications & planning

When a loved one passes away with a certain amount of assets, a federal estate tax return is due nine months after the date of death and taxes may be owed. Consult an advisor who specializes in tax about maximizing deductions, avoiding probate, and other strategies.

execute will

Execute a will and make sure to finalize any last changes that an executor or trustee will need to enact. Ensure loved ones are taken care of as designated.

Allocate CASH / ESTATE ACCOUNT

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.