Bridging the Gap through 2017 & Beyond
Resolutions, Fizzolutions. It’s not enough to want to change something. If all you do is WANT something to happen, it simply won’t.
There’s a magic switch that has to go on, and only you can throw it for yourself. Call it the Ah, ha! moment, an epiphany, or holy crap! It has to happen to you, for you, by you. Most times, it’s when a major event occurs in our lives, like having a baby, buying a house, getting divorced, turning 50. You get the idea.
New things you do this year have to be so compelling, that nothing will stop you. It wouldn’t hurt if they were easy to implement, and we have a few ways to help you do just that.
Keep an Eye on Your Credit: You can request a free credit report from each of the three reporting agencies once a year. Be sure to keep an eye on any youngsters’ credit as well, as it is easy for unscrupulous thieves to steal their identity, and you may not know until many years later. You can also get a good idea of your credit score for free from Credit Karma.
Review Your Insurance Coverage: Health insurance plans seem to change drastically every year. Gaps in your auto, home and liability protection can leave you and your family vulnerable. Get your coverage reviewed now, and have it all with one agent. Saving $100 could now cost you everything down the road. It’s not worth it.
A fire or earthquake could destroy your records and valuables. If someone is injured or worse in the incident, the whole sha-bang could become a mess. Be sure you save receipts and take photos or videos of your valuables. Store them online in case you ever have to file a claim.
Let The Force Be With You: At least the internet, anyway. Start using an online tool to track your net worth and spending. The free version of our Personal Financial Website provides all of this without having ads streaming across the screen to get you to part with the money you’re trying to keep.
You can also “attend” any of our Webinars on Demand whenever you want to watch one, without having to leave your home or receive a sales pitch at the end. Our extensive Education Center is great for when you want to learn or refresh yourself on a topic, and it has exceptional graphics and explanations. This is all free, all the time.
Now, Plan! – One of my favorite quotes was from a show I watched as a kid, “I don’t know where I’m going, but I’m on my way!” If you don’t know where you’re going, any road will get you there. It’s kind of like changing your major every year in college. Each time, you are starting from scratch to go down a path you’ve never been on.
You’ve probably done some great things in preparing for retirement so far. It’s just a matter of refining your approach and taking advantage of the time you have to build wealth and refine your management it. Some of the keys may be to know how much you need to be saving, how soon you could retire based on what you are currently doing, or knowing how much you’ll be able to spend in retirement.
Once you know what these benchmarks are for you, you can track them each year as well to see how you are doing. Some people find they can take less risk with their money. It takes the pressure off of watching the markets and wondering how that will affect you. It doesn’t make for sexy conversation at the cocktail parties, though.
Diversify – You can have a lot of different investment vehicles, but sometimes you might find they are all stuck in traffic on the same side of the road. Others may have too much in their company stock. Why wait until a market crash to make that discovery?
Some people have all of their savings in retirement plans with no way to minimize their taxes when it comes time to withdraw the money. It’s important to have an Access Plan that gives you the flexibility to decide from which accounts to withdraw money based on your tax situation down the road … not just when you are setting the money aside.
Invest a Little More from Every Pay Check – It’s easier than ever to save and invest for the future with no minimum to start an account. You can have automatic withdrawals set for the same day you receive your paycheck.
Out of sight, out of mind. The sooner the funds are out of your primary account, the sooner you will get used to living without them. You will find it easier to save more by gradually increasing the amount you set aside every two or three months.
Those Gnarly, Hidden Fees – You’d be surprised how much a 1% difference in cost can make on the long term results of your portfolio. Many times, people find they can save 2% or more in unnecessary costs simply by switching from mutual funds and variable annuities to exchange traded funds by eliminating the hidden fees, trading costs and style drift from the investment objective.
The difference will be significant over a 15 to 20 year period. It might cost a lot less simply to take the portfolio manager or your investment advisor on vacation with you each year.
Expect Tax and Regulatory Changes – You aren’t going on a train ride (with your money, that is), so expect that navigational changes will be necessary along the way – possibly this year. Having a plan and portfolio strategy that is proactive rather than reactive is going to allow you to adapt better as the economy and markets evolve in the coming years.