9 Strategies- That will help you Secure a Comfortable Retirement!!
By: Mike Nielson, CFPÂŽ Nielson Wealth Management www.Nielsonwealth.com Office: 303-290-8600
Introduction I grew up in Idaho in a great family with parents that taught my 4 brothers and me to work hard, save our money, and stay out of trouble. We were pretty good at the first two. From a very young age I have always known I wanted to work in the world of finance. As a kid instead of using my allowance and lawn mowing money to buy comic books and candy, I would buy business magazines and candy. After High School, I decided to carry on the family tradition by attending Utah State University in Logan, Utah. The same school both my parents and grandparents attended, met, and later married. The family tradition continues: I met and fell for the girl next door. Melissa and I were married in 2001. Utah State University had a great Business Finance Degree program that emphasized Financial & Retirement Planning. I was hooked after the very first lecture. That was over a decade ago and I am still hooked. I absolutely love my job. Working with people to help them navigate the world of finance and plan for their futures.
Over the last decade, I’ve had the privilege of meeting with literally thousands of hardworking people who were seeking help with their financial matters. I noticed an interesting trend during those meetings. Regardless of the size of clients’ bank account, they share a common fear “How do I make sure that I DON’T outlive my money.” Nobody wants to run out of money during retirement and be forced to be a burden on their family or friends. That is why I decided to put together these 9 strategies. These strategies contain some budgeting tools and useful financial planning ideas that hopefully can help prepare retirees and pre-retirees for their golden years. If you feel you could use some help planning for your golden years, please contact my office. I would be happy to sit down with you, discuss your situation, and put together a plan to help you enjoy a comfortable retirement.
Sincerely,
Mike Nielson, CFP®
9 Strategies that will help you Secure a Comfortable Retirement #1 Know where you are…………………………………… 2 #2 Reduce Debt and Expenses…………………………. 4 #3 Increase Income…………………………………………. 6 #4 Diversify-Diversify-Diversify………………………… 8 #5 Understand and Maximize Social Security….. 11 #6 Insure for the unexpected…………………………… 14 #7 Consolidate your Accounts…………………………. 15 #8 Plan for Emergencies …………………………………. 17 #9 Create an Estate Plan …………………………………. 21
Strategy #1: Know where you are. Imagine you’re driving over to visit a friend who just moved into a new house. No matter how hard you tryyou can’t find the house. You finally decide to call and inform them that you are lost and need help. The first question they will probably ask is: “Where are you?” That’s the same question you need to answer regarding your own finances before you can properly plan for retirement. Where does your monthly income come from? How is it spent? Where are you investments held? How much debt do you really owe? This exercise will help you better understand your current income/spending habits and your overall financial situation. Please take 30 minutes and complete these worksheets. Note: For this worksheet, please use net or take home pay. (Net, after all taxes have been deducted) Income (please enter monthly amount)______________________________________________________________ Wages, salary, commissions & bonuses, social security, pension Other income
A Total annual income (monthly x 12)
$___________ $___________ $___________
Expenses (please enter monthly amount) ____________________________________________________________ Household expenses Credit card payments Mortgage/rent payments $__________ Credit card monthly payment #1 $___________ Taxes $__________ Credit card monthly payment #2 $___________ Medical/health $__________ Credit card monthly payment #3 $___________ Insurance premiums (life/LTC/other) $__________ Tuition & child care $__________ Charitable contributions Homeowner’s insurance $__________ Gifts $___________ Telephone & cell phone $__________ Donations $___________ Cable & internet $__________ Gas/water/electric $__________ Other expenses Transportation (car/commuting) $__________ Other _____________________ $___________ Services (house cleaning/lawn) $__________ Other _____________________ $___________ Groceries $__________ Other _____________________ $___________ Restaurants $__________ Other _____________________ $___________ Clothing & dry cleaning $__________ Other _____________________ $___________ Entertainment (movies/vacations) $__________ Other _____________________ $___________ Pet supplies & services $__________ Personal products
$__________
B Total annual expenses (monthly x 12)
$___________
Total dollars available to invest, save, or spend___________________________________________________ Total annual income A – Total annual expenses B = Total Dollars Available $_____________ Were you surprised by any item? Pleased? Frightened? Do you need to change any spending habits?
Find additional copies of these worksheets on my website: www.nielsonwealth.com
Assets & Income
Current value
Liabilities
Current debt
Primary residence Vacation home/rental property Blue Book value of automobiles Trucks, boats, other transportation Savings accounts Checking accounts College savings accounts Individual stocks Individual bonds Variable annuities 401k/403b accounts
$___________ $___________ $___________ $___________ $___________ $___________ $___________ $___________ $___________ $___________ $___________
Balance on home mortgage Tuition loans Credit card balances Home equity loans Medical expenses Car loans Other debt Other debt Other debt Other debt
$___________ $___________ $___________ $___________ $___________ $___________ $___________ $___________ $___________ $___________
IRAs
$___________
Total liabilities
$___________
Fixed/immediate annuities Mutual funds Money market accounts Certificates of deposit Pension Veteran’s benefits Other assets Other assets
$___________ $___________ $___________ $___________ $___________ $___________ $___________ $___________
A Total assets
$___________
B
Total Net Worth Total assets A – Total liabilities B = Total Net Worth $____________ Are you happy with these numbers? If you think there’s room for improvement, set an appointment to talk with me about reducing debt or making your investments work harder for you.
#2 Strategy: Reduce Debt and Expenses “If you think nobody cares if you’re alive, try missing a couple of car payments.” Earl Wilson
If you want to feel more comfortable about your retirement years, you’ll need to exercise discipline over your spending habits. Reflect on the assets and liabilities worksheet in Strategy #1. Are you where you thought you would be or want to be? The answer to that question will tell you whether or not you need to make changes to your spending habits and reduce your debt. Reducing expenses Were you surprised by the dollar amount and number of monthly expenses in Strategy #1? You work hard for your money so make sure you know where it’s going and that you’re getting something of value from those expenses. Ask yourself, “can I live without something that’s costing me $100/month or can I find a similar item or service for less cost? Look for a couple items to cut out or reduce from your monthly expenses. Taking control of your money will give you a feeling of empowerment and will help you on the path towards retirement or help you remain retired. Saving $50 here and $100 there adds up over time. Saving an extra $300/month for 10 years equals $36,000, which isn’t chump change. Reducing debt There is good debt and bad debt. Good debt is usually debt that allows you to purchase an asset that will appreciate in value over time, like student loans for college or a home mortgage. Bad debt, like credit card debt, is usually debt you accumulated by purchasing something that will depreciate in value. Credit card debt The average interest rate on personal credit cards is over 13.75%.1 That’s a lot of interest to pay when money at the bank is only earning 1 – 2%. Consider these statistics: - The average credit card holder carries a balance of around $5,437. 1 - Nearly ¾ of American families report having a general-purpose credit card.1 If you are in the habit of paying off your credit card bills each month, keep up the good work. If not, I would advise you to make the necessary spending changes so that you can pay down/off your credit card debt. Home Mortgages For most people, owning your home is a good decision. You can benefit from ownership and over time build up equity. When possible, work to pay off your mortgage before you retire. If you currently have a home mortgage, consider doing the following: 1) Refinancing to a lower interest 15 year mortgage. Your monthly payments will be higher versus the popular 30 year mortgage, but this may help you pay off your home quicker. 2) Keep your current mortgage as-is and add a couple extra hundred dollars to your monthly payment. (See chart on next page) 3) Combine 1 & 2 together to pay off your mortgage even quicker.
1
US Census Bureau, Statistical Abstract of the United States, 2012
Check out the difference between a 15 and 30 year mortgage
Mortgage Payoff Summary
30 vs 15 yr mortgage $300,000 $250,000 $200,000 $150,000
Loan Amount Loan Term Interest Rate 30 yr monthly payment (blue line) Interest paid
$250,000 30 years 4.5% $1266.71 $206,016
Loan Amount Loan Term Interest Rate 15 yr monthly payment (red line) Interest paid
$250,000 15 years 4.0% $1849.22 $82,859
$100,000 $50,000 $0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 30 Yr Mortgage
15 Yr Mortgage
Let’s do the math: A 15 year mortgage will save you $123,157 ($206,016 - $82,859) in interest.
What if you added $250 more to your monthly 30 year mortgage payment?
$250 Extra per Month 300000 200000 100000 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 30 yr Mortgage
Add $250/mth
Mortgage Payoff Summary Loan Amount Loan Term Interest Rate Normal payment Normal interest paid Extra Amount Extra $250/mth shortens mortgage Interest saved
$250,000 30 years 4.5% $1,266.71 $206,016 $250/mth 8 yrs $65,944
Strategy #3: Increase Income Look for ways to increase and maximize your income. A safe and sustainable withdrawal rate during retirement varies based on age but is usually between 5%-8%.
If you are still working: Rule of 72 How many years will it take your money to double in value? Divide the rate of return into 72. 1%/72=72 yrs 3%/72=24 yrs 6%/72=12 yrs 8%/72= 9 yrs
Evaluate your financial situation from Strategy #1. One of the best things you can do to prepare for retirement is to plan ahead. How much do you already have saved in retirement accounts? Will you have a work pension? When do you plan on starting Social Security? If you took a 5% income withdrawal from your retirement accounts is that enough to live on combined with Social Security, work pension + other income? If not, how much are you contributing to your retirement accounts each year? Consider increasing it. How are your retirement accounts invested and how have they performed? If you don’t know, set an appointment with my office and we can review them with you. You need to make sure that your hard earned retirement savings are working hard for you. While you’re still working, use this time to pay down or payoff your home mortgage and other debts. Make sure you maximize your Social Security benefits, discussed more in Strategy #5. You may want to consider delaying your retirement date by a couple years. Consider these hypothetical examples:
Retirement age 62 Retirement Accounts of $1,000,0000. Withdrawal income of 5% = $50,000 a year. Social Security income = $18,000 a year. (25% Reduction under age 66) Work pension = $12,000 a year. Total annual income = $80,000! What if you waited 4 years and retired at age 66? Retirement Accounts grew 5% for 4 years =$1,215,000. Withdrawal income of 5%= $60,750 a year Social Security income increased = $24,000 a year. Work pension increased = $16,325 a year. Total annual income of = $101,075!! What if you waited 8 years and retired at age 70? Retirement Accounts grew 5% for 8 years =$1,477,000. Withdrawal income of 6%= $88,620 a year Social Security income increased = $31,680 a year. (32% increase over age 66) Work pension stayed the same = $16,325 a year. Total annual income of = $136,625!!!!
If you are currently retired:
Review all your retirement income sources: Social Security, pension, annuities, and investment accounts. Make sure your money is invested properly and generating income. In the case of Social Security, maximized as in Strategy #5. Look into a reverse mortgage and decide if that’s an option for you. One of the biggest enemies during retirement is INFLATION. Make sure your investments are properly allocated and invested so your income can keep up with rising living costs. A postage stamp was .29 cents in 1993 versus .46 cents in 2013.
Versus 1993
2013
Consider this retirement income plan called the Income Bucket Strategy:
With this strategy, you’ll allocate your money into three income buckets. Customize the income numbers in the following steps to fit your individual income situation.
Step 1 - Calculate how much investment income you need from your retirement accounts. Start by reviewing your monthly living expense needs from Strategy #1. Let’s say your monthly living expenses are $5,000. How much do you receive in Social Security? How much is your work pension? If you receive $3,500 a month between Social Security and your work pension, you’d need to generate $1,500 a month in investment income from your retirement accounts. ($3,500 + $1,500 = $5,000)
Step 2 – Bucket A will hold 12 months of investment income in either a checking/savings account ($1,500 x 12 = $18,000). Or whatever your individual investment income amount is X 12 months. Use this money to help pay your monthly living expenses.
Step 3- Bucket B will hold 48 months of investment income in bonds, CD’s, or fixed annuities. Hold $72,000 ($1,500 x 48) in this bucket or whatever your individual investment income amount is X 48 months. Each month, transfer $1,500 into Bucket A to replenish the $1,500 which was spent on living expenses.
Step 4 – Bucket C will hold the remainder of your retirement assets. Invest them in stocks, stock mutual funds, and real estate to provide potential growth and to outpace inflation. Every 3 months, transfer $4,500 ($1,500 x 3) or whatever your individual investment income amount is X 3 months to Bucket B. This will replenish Bucket B. This strategy will allow the retirement assets in Bucket C to stay invested much longer and potentially earn higher returns.
Bucket C Growth Assets
Move $$ every 3 months
Bucket B Fixed Income Assets
Move $$ every month
Bucket A Savings/ Checking
Move $$ every month
This income bucket strategy can be set up so the “bucket replenishing” happens automatically. That way you don’t need to think about transferring money each month between buckets and lets you enjoy your hard earned retirement.
Strategy #4: Diversify - Diversify – Diversify Diversification – it’s a fancy investment term meaning- Don’t put all your eggs in one basket. Diversification is important and spreading your investment risk over many different investments should help minimize the ups and downs of investing. Your retirement accounts can be spread out among cash, bonds, CD’s, stocks, real estate, mutual funds, gold/silver, and annuities, just to name a few. Each person has a different comfort level with risk and will react to market fluctuations in a variety of ways. How you invest and allocate your retirement assets is one of the most important decisions you can make. In fact, research indicates that 92% of a portfolio’s return can come from asset allocation. 2
Portfolio Returns
Asset Allocation Security selection Market Timing
So what investments and allocation mix is right for you? I would be happy to sit down with you and help you determine which assets and best mix of investments best suits your unique situation.
2 Brinson, Singer and Breebower, “Determinants of Portfolio Performance II, “Financial Analyst Journal, May/June 1991.
Strategy #5: Understand and Maximize Social Security What it takes to qualify for Retirement Benefits: When you work and pay Federal Insurance Contributions Act (FICA) taxes, you earn “credits� toward Social Security (SS) retirement benefits. These credits are based on your annual earnings. You can earn up to four credits per year. Once you have acquired 40 credits (about 10 years of employment), you are fully insured and eligible to receive retirement benefits. All benefits are derived from your primary insurance amount (PIA). Your PIA is calculated using your best 35 years of employment. Your PIA is the monthly benefits for which you are eligible at your full retirement age (FRA).
Full Retirement Age: Year Born 1937 or earlier 1938-1942 1943-1954 1955-1959 1960 +
Full Retirement Age (FRA) 65 65 + 2 months for every year after 1937 until 1943 66 66 + 2 months for every year after 1954 until 1960 67
Collecting Benefits Early: Your PIA is payable at your FRA, you can however collect a benefit as early as age 62. But if you choose to do so, you will permanently reduce your benefit. Your benefit will not be adjusted or increased to FRA benefit levels when you attain your FRA. The amount of your reduction will depend of two things, your FRA and the number of months until you attain it. If you start receiving benefits at age 62, you will receive the maximum reduction.
Reduced Benefits at Age 62: FRA 65 66 67
Monthly Benefits Reduction 20% 25% 30%
Waiting to Collect Benefits: If you choose to delay collecting benefits beyond your FRA, Social Security will give you a delayed retirement credit increase of 8% annually. Your benefits max out along with the 8% credit at age 70.
FRA=Full Retirement Age
PIA= Primary Insurance Amount
Working while collecting benefits: If you collect benefits prior to FRA, you will be subject to an earnings test every year until you reach FRA. If your earnings are over a certain limit, Social Security will withhold part or all of your benefits. Note: the earnings test only looks at salary or wages of the person collecting benefits, not the wages of a spouse or any other type of income.
2013 Retirement Earnings Limits Under FRA $1 of benefits withheld for every $2 in earnings above the limit of Year individual reached FRA $1 of benefits withheld for every $3 in earnings above the limit for the months prior to attaining FRA. Month individual reached FRA and beyond Reduction no longer applies
$15,120/year
$40,080/year
Unlimited
Collecting Benefits as a Spouse If you are married to an individual who files for SS retirement benefits and you are at least age 62, you may be entitled to collect spousal benefits. Spousal benefits will be equal to 50% of your spouse’s PIA. If you are entitled to your own benefits, your benefits will always be paid first. If your benefits are less than 50% of your spouse’s PIA, spousal benefits will be paid in addition to your own. These combined benefits will equal 50% of your spouse’s PIA, assuming you start collecting at FRA or later. For example, a husband has a PIA of $2,600. The wife is entitled to 50% of her husband’s PIA or $1,300, as spousal benefits. However, because she is entitled to her own PIA benefits of $600, the spousal benefits will be reduced by that amount. The wife, starting to collect at FRA, will receive a combination of benefits- $600 (own) and an additional $700 (spousal) to equal $1,300. So the husband and wife would collect a total of $3,900 ($2,600 + $1,300). What if you wait to collect spousal benefits? Unlike your own benefits, spousal benefits will not receive delayed retirement credits if you defer collecting them beyond FRA. Spousal benefits are at their maximum when you reach FRA, so there would not be any advantage to defer collecting them. What if you are divorced? If you are not currently married but had previously been married to the same individual for at least 10 years, you would be entitled to collect spousal and/or survivor benefits. You may be entitled to spousal benefits once both you and your ex-spouse reach age 62. You are not required to wait until your ex-spouse files for benefits. FRA=Full Retirement Age PIA= Primary Insurance Amount
What about collecting survivor (widower) benefits? If you have been married for at least nine months and your spouse passes away, you may be entitled to survivor benefits. The amount of your survivor benefits is dependent on when your spouse commenced benefits. If the death occurs prior to your spouse collecting benefits, your survivor benefits will be equal to 100% of your spouse’s PIA when you attain FRA. If your spouse had begun collecting benefits, your survivor benefits will equal his or her actual benefits, assuming you have attained FRA. The survivor benefits will replace your other Social Security benefits if higher. Filing and Suspending If you are at least FRA, you can elect to file for benefits but suspend collecting them until a later date. This would enable your current spouse to collect spousal benefits while your own benefits earn deferred credits. Filing and suspending also enables you to retroactively start collecting as of your filing date if you change your mind about suspending. Choosing between Benefits If you are entitled to both individual and survivor benefits, you can choose to begin collecting one and then switch to the other at a later date. Similarly, if you are at least FRA and married, you can claim spousal benefits only and then switch to your own benefits at a later date. Windfall Elimination Provision (WEP) If you work for an employer who does not withhold FICA taxes from your salary, such as a government agency or school district, the pension you receive based on that work may reduce your SS retirement benefits. WEP primarily affects individuals who earned a pension in any job where FICA taxes were not paid and who worked in other jobs long enough to qualify for SS retirement benefits. Government Pension Offset Individuals who receive a pension from a federal, state, or local government based on work where FICA taxes were not withheld may have their SPOUSAL/SURVIVOR benefits reduced. SS benefits will be reduced by 2/3 of the government pension. For example, if an individual receives $1,500 from a government pension, 2/3 of that pension is $1,000. The individual’s spouse passes away and is eligible for a spousal benefit of $1,800. Under the Government pension offset this individual would be entitled to survivor benefits of $800 ($1,800 $1,000). For addition information Most of you have been paying into FICA or Social Security for most of your working years. Before starting benefits, take some time to understand and know your benefit options. Visit SSA.GOV for more information. You can also schedule a one on one appointment with my office and we can run a detailed personalized Social Security report. Sources: SSA.GOV and Blackrock
Strategy #6: Insure for the unexpected Nobody likes to think about death, but we all need to plan for it. One of the most important things you can do to protect your family is to make sure you have adequate insurance. What is adequate? My office can run a personalized evaluation to determine if your current insurance amount is adequate for your needs. I know this first hand. My father-in-law passed away in 2011 at the age of 60, after a long battle with cancer. Fortunately he had planned ahead and owned sufficient life insurance to help provide for my beloved mother-in-law. It gave her such peace of mind to know she would be okay financially and she could continue to live in the same house where they had raised their 4 children and lived for the last 26 years. If you are married, have children, own a home, are subject to estate taxes, or are responsible for other family members, you should probably have life insurance. The general rule of thumb is own enough life insurance to pay off your debts and current income needs for 5-7 years. Life Insurance There are several different types of life insurance available to suit most people’s needs and budgets. TERM LIFE INSURANCE Term life insurance is like renting. You rent a policy for a specified amount of time, for a specified premium, for a specified death benefit. For example, you may be able to get a 20 year $100,000 policy for $100/month, (depending on age and health). At the end of the 20 year term, the policy will expire unless you decide to renew at a higher premium. This type of policy is cheaper compared to a permanent policy which is often used to cover specific needs that will disappear in time, like a mortgage. PERMANENT LIFE INSURANCE Permanent life insurance is like owning. You own this policy which provides lifelong protection. It’s known by such names as whole life, universal life, variable life, and indexed universal life. As long as you pay premiums, the death benefit will be there. Disability Insurance: If you are the primary breadwinner, or you run your own business, you might want to consider disability insurance. Disability income will help replace your salary or wages by providing monthly benefits in the event of a temporary or permanent disability. Long-term care insurance: Long-term care (LTC) insurance is an insurance policy that offers benefits that pay for care or treatment for an injury, illness, or loss of functional capability. LTC insurance offers many benefits, including a way for a family to protect itself against the high cost of nursing homes.
Strategy #7: Consolidate your Accounts If you are like most people you have more than one retirement account. Maybe you have a 401k with your current and old employer(s) or an IRA with multiple advisors and one at the bank. While there are no rules regarding how many IRA’s and 401k’s accounts a person can have, trying to manage multiple accounts can be a headache and lead to unnecessary complications and unwanted potential mistakes. Consider consolidating your multiple IRA’s and 401k’s into a Single IRA. This will help in at least 3 ways: 1) Dramatically simplify your record keeping. Rule of 2) Help you avoid overlooking important IRS deadlines like RMD’s (Required Thumb: Minimum Distributions) RMD’s generally are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 70 ½ If you are years of age or, if later, the year in which he or she retires. However, if the retirement plan no longer at account is an IRA or the account owner is a 5% owner of the business sponsoring the your old retirement plan, the RMDs must begin once the account holder is age 70 ½, regardless of job- your whether he or she is retired. Retirement plan participants and IRA owners are responsible money for taking the correct amount of RMDs on time every year from their accounts, and they shouldn’t face stiff penalties for failure to take RMDs. Failing to take an RMD can result in a penalty of 50% of the distribution amount required. be there 3) Reduce asset allocation mistakes and inconsistent or contradictory either. beneficiary designations.
Advice: Find a Financial Professional (preferably a Certified Financial Planner, CFP®) who you personally LIKE and TRUST and consolidate your accounts with that person.
Strategy #8: Plan for Emergencies Be Prepared…. the meaning of this motto is that a scout must prepare themselves by previously thinking out and practicing how to act on any accident or emergency so that he/she is never taken by surprise. Robert Baden-Powell Prepare yourself and your family for the event of an unforeseen situation. When you’re in a crisis, it’s very difficult to think clearly and calmly about the best course of action. That’s why I strongly encourage you to prepare now, when you have time to think about your options and plan ahead. Take 30 minutes and complete the emergency preparedness worksheet, so you will have it at your fingertips if/when the need ever arises. Financial Emergencies: Financial experts agree that an emergency fund is a necessary foundation and vital building block of everyone’s financial plan. How much should your emergency fund be? That depends on your monthly living expenses and your occupation. Living expenses should include mortgage, utilities, food, gas, etc. The worksheet under #1 strategy will be helpful when calculating your monthly living expense total. Depending on your occupation, you should have between 3 and 6 month’s worth of living expenses in your emergency fund. If your monthly income is stable, have 3 months; but if your monthly income varies have 6 month’s worth of expenses saved. Keep your emergency fund in a liquid, safe, interest bearing account, like a savings or money market account. Keep this money separate from your other accounts. An emergency fund is just that, money that you have saved for a “rainy day”; not the “I can’t live without a new 60’’ flat screen TV-emergency” account. As an extra precaution, keep a portion of your emergency fund in cash, secured in a very safe place in your house. Medical Emergencies Plan ahead. Write down and keep in a safe convenient place, all your vital medical information for you and your family. Information such as: physician(s) name and number, blood type, allergies, medication, insurance ID numbers and coverage terms. Natural Disasters and other Emergencies Have a 72 hour kit already made and stored in a convenient, easily accessible location around your home. If you’re delayed in traffic, is there someone who can pick your kids up from school or day care? For more information about 72 hours kits and other emergency preparedness resources visit www.ready.gov.
Completion Date: Self
____________________________________________________________________________________
Full legal name______________________________________________ Social Security #_______________________
Date of birth:_________________
Driver’s license #______________________
Passport #____________________
Primary care physician name and phone _________________________________________________________ Medical plan name and identification # __________________________________________________________ Blood type ________________
Allergies
Medications Current employer and address Supervisor name, phone, and email
Spouse/Domestic Partner____________________________________________________________________ Full legal name Social Security #
Date of Birth
Driver’s license #
Passport #
Primary care physician name and phone # Medical plan name and identification # Blood type
Allergies
Medications Current employer and address Supervisor name, phone, and email Emergency contact list_______________________________________________________________________ Name
Home phone
Cell phone
Name
Home phone
Cell phone
Children___________________________________________________________________________________ Pediatrician name and phone Other doctor name and phone Day care provider name and phone Name (child 1)
Social Security #
School name
Address and email
Name (child 2)
Social Security #
School name
Address and email
Name (child 3)
Social Security #
School name
Address and email
Name (child 4)
Social Security #
School name
Address and email
Phone
Phone
Phone
Phone
Pets______________________________________________________________________________________ Pet 1
Pet 2
Veterinarian name and phone Financial professional________________________________________________________________________ Financial professional name and firm Address, phone, and email Account 1
Account 2
Account 3
Account 2
Account 3
Financial professional name and firm Address, phone, and email Account 1
Attorney and Tax professional_________________________________________________________________ Attorney name and firm Address, phone, and email Tax Accountant name and firm name Address, phone, and email
Insurance__________________________________________________________________________________ Insurance Agent name Address, phone, email Life insurance policies
Death Benefit
Policy 1________________________
___________________
Policy 2________________________
___________________
Homeowners___________________
Auto____________________________________________
Umbrella policy
Disability
Long-term care
Other
Bank______________________________________________________________________________________ Bank name
Address/phone
Checking/Savings/CD account # Bank name
Address/phone
Checking/Savings/CD account # Bank name
Address/phone
Checking/Savings/CD account # Debt______________________________________________________________________________________ Mortgage
Account #/Monthly Payment
Address and phone Second Mortgage/HELOC
Account #/Monthly Payment
Address and phone Car loan(s)
Account #/Monthly Payment
Address and phone Credit Card
Account #
Address and phone Other loan Address and phone
Account #
Strategy #9: Have an estate plan The importance of a Will: Funny Story: Anthony Scott in his last will and testament wrote: To st my 1 wife Sue, whom I always promised to mention in my will. Hi Sue!
John Denver went out for a routine plane ride when the unexpected happened. He crashed into the bay and died. What was he thinking? Probably not about the fact that he had left three children and no will, with no directive about the disposition of his $20 million estate. Jackie Onassis Kennedy on the other hand, left an explicit will detailing the handling of her $200 million estate, including specific bequests to her children, gifts for her friends, and 36 pages of directives on the distribution of her property including her Fifth Avenue apartment in New York City and an autographed copy (signed by Robert Frost) of JFK's inaugural address.
While you may not have $200 million (yet!), it is important that you take control of your legacy and write a will. Seven out of 10 Americans die "intestate," meaning without a will. In fact, each state has its own rules regarding the distribution of property as well as laws that dictate what constitutes the elements of a valid will. Just like any other area of financial planning, knowing the basics can go a long way. Unfortunately, most of us don't like to think about writing a will, but the best way to provide for your heirs is to do proper planning in life, while you can!1 While I strongly urge you to seek professional advice, there are some websites with great information on the subject of wills. Try www.legalzoom.com, www.nolo.com, or do a Google search for “wills and estate planning.�
Estate Planning can help you: Minimize death expenses - avoid death taxes - deliver assets to the proper people - ease the burden on your heirs - name a guardian should your young children or you become incapacitated or pass away Of course, each person’s situation is unique and estate planning is an area where professional advice is crucial. Some common estate planning tools include: life insurance, 529 plans, wills and trusts, long-term care insurance, and gifting. Good legal and financial advice can help relieve stress on your family and help your estate pay as little in taxes as possible. As with any legal document, make sure to keep your will and estate plan current. Any time you have a major life change- death, job change, birth, divorce, marriage, receive an inheritance- you should review your estate plan and make any necessary updates.
1
Bankrate.com