SPECIAL NEEDS FINANCIAL PLANNING FOR THE NEW YEAR

By Andrew Komarow, MSFS, CFP®

IF 2020 HAS TAUGHT US ANYTHING, IT’S THAT (TO QUOTE MIKE TYSON), “EVERYONE HAS A PLAN UNTIL THEY GET PUNCHED IN THE FACE.” NO MATTER HOW WELL-PREPARED YOU THINK YOU MAY BE, MOST OF US AREN’T TRULY READY FOR THE CURVEBALLS LIFE CAN (AND WILL) THROW AT US.

That’s why it’s important to have a plan in place for the future if something unexpected happens. Having a plan in place for the future will ensure you won’t just survive the unexpected, but thrive.

Creating financial plans is particularly important for special needs families. Over the years, I’ve found many of them live “paycheck to paycheck” in both a literal and emotional sense. Having a plan can alleviate that burden and help secure your future.

Though you are statistically likely to break most of your New Year’s resolutions within a couple of weeks, creating a financial plan should be one you follow through to the end. Every small step towards your plan is a step in the right direction.

When building anything new, the first thing you need to do is clear away the old and lay the foundation.

Here are four simple steps you can take that will help you build a solid foundation for your financial plan.

1. Organize all your records and get your financial life in order

The first step with any planning is to know where you are and what you have! I find the beginning of the year is the easiest time for families to do this. Not only are they thinking about taxes (and hopefully tax refunds), but they are also getting all their year-end documents in the mail. Develop a system that will help you take inventory of these documents and organize them in a way that will make it easy to find what you are looking for in the future. If you’re having a difficult time, don’t be afraid to use software or outsource the work to a financial planner or accountant. This step is the absolute hardest obstacle for many families, and this time of the year is the perfect time to do it!

2. Consolidate the things you need and get rid of the things you don’t

As painful as it may be, when you have finished organizing everything, take a hard look at the things you didn’t know you had. (We know you have unused Audible credits if you ever signed up for them). Approach the process like you would clearing out a junk drawer: if you want to put things in a smaller drawer, you need to get rid of the things that are clogging up your finances and then consolidate the things you do need. Find ways to make the things you need more efficient and cheaper. Do you have smaller accounts with low balance fees that can be combined into one account? Do you have smaller life insurance policies that can be combined into one life insurance policy and potentially save money with more coverage? It happens more often than you might think.

3. Take a hard look at things you are using a lot of and things you are not

You do not always need to know exactly how something works or what something is, but you do need to know why you opened it in the first place! For example, you may not be able to re-write an entire will or repeat all the fancy legal jargon an attorney used. However, you should be able to at least tell someone else the reason why you got the will and what you intend to do for yourself.

New Year Financial Planning

4. Be proactive in filling gaps in your financial plan

To get the most out of your financial plan, you need to determine if anything is missing and take steps to correct those omissions. Here are the three most important ones to consider: y When was the last time you had an independent insurance agent shop around your auto/home insurance coverage? If you haven’t done this recently, consider doing it now. Who doesn’t want more coverage for less money? y Do you have an estate plan or a will? If not, stop reading this and get one! You don’t need to spend thousands of dollars you don’t have, although, for complex planning, it really makes sense to find a trusted advisor. Something is always better than nothing. y Are you putting enough money into your own retirement fund? As a parent, you are your child’s champion, dedicating countless hours to ensuring their future is secure. However, you also need to remember you can’t work forever. As good as an ABLE account is, you should also make sure you are taking care of your own retirement funds first.

You may not even know it yet, but in taking these simple steps, you have already started to plan for the future. You’ve investigated ways to improve your financial situation, and you are now better equipped than ever for one of life’s curveballs to hit (because they always do).

If this article leaves you with more questions than answers, don’t worry! We know that this is a lot of information to take in, and you may have some questions that only you can answer. Moreover, if you still have lingering questions, we will have a bi-monthly column where you can submit all your questions for us to answer, starting in the next issue!

Andrew Komarow is the founder of Planning Across the Spectrum, a financial planning firm that specializes in helping individuals, caregivers, and families with autism and intellectual disabilities gain financial security. Andrew earned a Master of Science in Financial Services (MSFS) and has achieved the distinction of being a Certified Financial Planner™ (CFP™). He also has certifications as a Behavioral Financial Advisor (BFA™), Chartered Special Needs Consultant (ChSNC®), and an Associated Estate Planner (AEP®) among his other designations. Andrew frequently advocates for those with autism and other intellectual and developmental disabilities. Andrew is a frequent guest speaker on his own experiences or on various financial and insurance planning topics.

Website: Planningacrossthespectrum.com Email: Andrew@planningacrossthespectrum.com