Hopefully, your financial advisor is contacting you regularly via email. through emails, videos, articles or phone calls when they have important information to share with you. But when should you see your counselor?
There are many life events that may prompt you to consult them, and I thought we’d cover some of the most common reasons for you to reach out.
1. Change of employment status.
If you are changing jobs, there are several reasons to consult with your advisor. Deciding whether you should switch your retirement plan is the most important of these. You may need to review your new company’s benefits package, including insurance (health/life/disability), 401(k) plan, tax withholding, and more.
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A new job may also incur more or less expenses related to travel, mileage, etc., which may affect your financial plan. Losing a job requires planning for health insurance, cash flow, and more.
2. The children are going to go to college.
Ideally, you should file a mock FAFSA two years before your children go to college (opens in new tab) to get an idea of your financial aid status. Since the FAFSA now looks at your tax return from two years ago, you can proactively plan to potentially lower your Expected Family Contribution (EFC), which can help lower the cost of college.
3. Change of family status.
Marriage or divorce can obviously have a dramatic impact on your financial plan. Alimony, child support, pension or retirement plan contributions can make a big difference in your future circumstances.
Marriage, especially a second marriage, requires additional planning, especially if assets are intended to remain in each of your families.
4. Death or care of a parent.
Estate planning for your elderly parents can mean the difference between preserving an inheritance or spending money on yourself. Unfortunately, I have seen many children of elderly parents have to delay their retirement because of the costs associated with helping their parents. Proper planning can help reduce these costs.
5. Planning for retirement.
While the prospect of retirement is certainly appealing, there are many decisions that must be made in preparation for retirement itself.
Health insurance, Social Security claims, retirement options, and retirement plan distributions are all things to consider before you stop working.
6. Birth of a child.
A new baby brings a lot of joy, but it also takes a lot of time, and sometimes planning is the last thing on your mind. You should consider 529 college savings plans and review your life insurance and your general estate plan. Important decisions need to be made, such as who would have custody of your child if something happens to you.
7. Change in your health.
A change in health may require revisions to your financial plan. Revised life expectancy assumptions or cost increases are usually the most common changes.
8. Big purchase.
Ideally, you should contact your advisor before making large purchases. Advisors can help determine which is the most tax efficient asset to use or if financing is appropriate. Also, what impact will this new purchase have on the viability of your project?
Excellent communication between clients and consultants is critical to both the quality of the relationship and the accuracy of the project itself.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), a subsidiary of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not reflect those of Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is recommended that you consult your financial professional, attorney or tax advisor regarding your individual situation. To view the CRS form, visit https://bit.ly/KF-Disclosures (opens in new tab).
This article was written by and represents the views of our contributing advisor, not Kiplinger’s editors. You can check the adviser’s records with the SEC (opens in new tab) or with FINRA (opens in new tab).