Why a Financial Plan is so Important | Kaiser Financial Solutions

LWMJanFeb2015-smallfinal_Page_29Many of us are familiar with the expression, “failing to plan is planning to fail.” As a Certified Financial Planner®, I can assure you that—when it comes to financial goals and objectives— this old adage still rings true.

In fact, it may be more relevant than ever. As the last few years have shown, it isn’t easy for most Americans to make financial headway. With pensions in decline, interest rates near historic lows, and household incomes yet to bounce back to prerecession levels, it takes persistence and sound planning in order to get ahead.

Not sure how to begin? That’s okay—it’s easy to become overwhelmed if you think about all your needs at once. Instead, try taking it one step at a time, starting with the basics:

Build an emergency fund—No matter where you are in life, it’s important to set aside 8-10 months of living expenses. You don’t have to do it all at
once, but every dollar you save today is a dollar you won’t have to borrow if something unexpected happens.

Protect your home and family—Most of us have people who depend on us to keep a roof over their heads and food on their plates. That’s a big responsibility, but it’s one life insurance can help you meet—even if something tragic takes you away. You can start with an affordable term life
plan at first, and then add more coverage as your needs and budget grow.

Prepare for major expenses like college—As a parent or grandparent, you naturally want the best for your loved ones. Now’s the time to start a college or wedding fund so they won’t have to go into debt to make their dreams for the future come true.

Get ready for retirement—There are plenty of ways to set aside money for retirement: 401(k)s, IRAs, and fixed deferred annuities* just to name a few. But they all have one thing in common—the sooner you start, the better off you’ll be in the long run. Try to increase your contributions over time—perhaps 1% with each raise—or, if you are age 50 or older, look into some of the ‘catch-up’ provisions that may allow you to contribute even more. While the recession forced many of us to take a step back financially, it also helped refocus our attention on the things that really matter. A sound

financial plan can help us accomplish many things—but perhaps the most important is making sure we never lose sight of them again.

By Valerie Kaiser, CFP®, Agent, (CA#0F39945)
New York Life Insurance Company
703-610-4073

Protecting The Stay-At-Home Spouse | Valerie P. Kaiser, CFP

LWMNovDec2014small_Page_10When married couples have young children, often one spouse stays home while the other works outside the home. While most parents understand the necessity of purchasing a life insurance policy on the income earner, few realize the importance of also insuring the stay-at-home spouse.

Being prepared for the unexpected.

What if the stay-at-home spouse suddenly died? The family would be devastated. While friends and family members would initially pitch in to help, eventually they would return to their regular lives. Before the surviving spouse returned to work, a caretaker for the children and home would need to be hired, presenting a potential financial hardship. Had life insurance been purchased on the stay-at-home parent, however, the family’s needs would have been protected.

Measuring the value of the stay-at-home spouse.

Despite the importance of the stay-at-home parent, there’s little research to quantify its value. In its 13th annual “Mom Salary Survey,” Salary.com reports the most popular functions performed by mothers equate to $113,586 per year1 in salary. Also, it states the stay-at-home spouse works a 94-hour week, performing, among other roles, the duties of housekeeper, cook, day care teacher, driver, and psychologist.

LWMNovDec2014small_Page_11Flexible, customizable choices.

The type of policy you select depends on your needs and budget. Term life insurance provides affordable coverage for several years. In contrast, permanent life insurance offers protection for your entire life (provided premiums are paid) and accumulates cash value tax-deferred. This cash value can be accessed (loans accrue interest and reduce the policy’s cash value and death benefit). Plus, riders, available with term and permanent life insurance, enable you to customize your policy to meet and grow with your changing needs.

The loss of a parent is an emotional hardship for a family; purchasing insurance coverage for a stay-at-home spouse can help ensure that it doesn’t become a financial hardship as well.

This educational, third-party article is provided as a courtesy by Valerie Kaiser, CFP®, Agent, (CA#0F39945) New York Life Insurance Company. To learn more about the information or topics discussed, please contact Valerie Kaiser, CFP® at 703-610-4073.

Out with the Old: What to Shred, and When

shred guide

Are You and Your Spouse on the Same Page? – Katie McAuliffe

well fargo imageAfter 24 years of marriage, Joe and Jane often finish each other’s sentences. So imagine how surprised they were when some differing goals emerged during a recent retirement income planning discussion with their Financial Advisor. As their advisor led the couple through an exercise designed to help them set retirement priorities, they discovered that Joe was eying a particular pocket of savings to enable his early retirement. Jane, on the other hand, viewed that same account as a fund for their children’s college education.

Such discrepancies are common, even for couples who communicate well. “When you’ve lived with someone a long time, you may assume you know what your partner is thinking,” notes Donna Peterson, Senior Vice President in Retail Retirement at Wells Fargo. “If you’re not on the same page, you could thwart each other’s objectives without knowing it,” she warns — as in the example of Joe and Jane.

Taking the Long View

Uncovering such differences and deciding how to handle them is a critical early step to building a retirement income plan for both partners. During this first stage, your Financial Advisor will ask each of you key questions, such as when you want to retire, where you’d like to live, and how you ideally would fill your days during retirement.

The answers to those three questions in particular can affect major financial decisions you make as a couple throughout your marriage, so it’s best to start discussing them well ahead of retirement. For example, if you’re in the market for a new home, decisions about how much to spend and how long you’ll stay there may change when viewed through the lens of retirement.

It may make sense to economize on a house you intend to occupy only until your children are through grammar school, or to invest more heavily in a lifelong residence. The size of the mortgage can also affect how much you contribute to retirement savings, as well as whether you enter retirement carrying debt.

Buying a home is just one choice into which retirement can factor. “Responsibilities to family, such as paying for education or caring for older relatives, can influence your plans too,” Peterson says. And just as circumstances may change, so too can your retirement income plan — but it’s important to start with as complete a vision as possible.

Starting the Conversation

Surprisingly, Peterson recommends that you and your spouse meet with your Financial Advisor to discuss your retirement goals in detail. “The most successful retirement plan conversations are generally a little spontaneous, so allow your Financial Advisor to serve as the catalyst for the discussion as well as your guide through it.”

This discussion may stretch over a few meetings, since there’s a lot of ground to cover. Your advisor will not only help you discover your ideas about retirement but also begin to educate you about issues that can affect your income plan, such as:

  • Health care costs
  • Risk tolerance
  • Market and economic realities
  • Inflation and taxes

“Very few couples have considered all these elements before consulting a professional,” says Peterson.

Your Financial Advisor can suggest ways to integrate these considerations into your joint retirement income plan. You may walk out of the session with a stronger strategy, as well as a greater understanding of your spouse’s hopes and dreams — knowledge that can make your partnership even stronger.

Wells Fargo Advisors is not a legal or tax advisor. However, its Financial Advisors will be glad to work with you, your accountant, your tax advisor and/or your lawyer to help you meet your financial goals.

This article was written by Wells Fargo Advisors, LLC and provided courtesy of Katie McAuliffe, Financial Advisor in Leesburg, VA. Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK GUARANTEED/MAY LOSE VALUE. Wells Fargo Advisors, LLC, Member SIPC, is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company. ©2012 Wells Fargo Advisors, LLC. All rights reserved. 0812-0078 [87568-v1] 08/12

Katie McAuliffe is a Financial Advisor with Wells Fargo Advisors, LLC., in Leesburg, VA

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