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Personal Financial Planning Items of Interest


The 2017 Tax Year is over!  Well, for some of us.  If you filed an extension the year continues.  CPAs never really have time off, at least that is what they tell me.  Regardless, I thought it was worth sharing a few reminders.  These reminders are related to your personal financial planning picture and not necessarily just tax items.

  • If you can afford to max out your employer-sponsored retirement plan, do!  The maximum employee contribution for 2018 is $18,500 for 401k and 403b plans.  If you are 50 years old you can add an extra $6,000.  I talked to a new client who realized at the end of 2017 they were not putting in their maximum contribution.  Unfortunately, it was too late for them to correct it.  As a result, they had a higher tax bill for 2017. Remember – It isn’t what you make. It’s what you keep!  If you cannot remember the last time you adjusted your 401k contribution amount, get with your HR soon.  Odds are your contributions have not adjusted as the allowed contributions have increased over time.
  • Since you will be talking to your HR department, it is probably worth checking on the beneficiary information for your work benefits.  These items primarily fall under your employer-sponsored retirement plan and any life insurance you have through work.  It is not unusual for me to talk to someone whose beneficiary on a life insurance policy is someone other than a spouse simply because there was no spouse when they started their job 20+ years ago.  This also applies to 401k beneficiaries, especially contingent ones.  When I first started in this business I dealt with quite a few 401k plans. In one case an employee passed away with his mother listed as the beneficiary of everything, Well, he had multiple children with two different women, neither of whom was ever a spouse.  Before they had his funeral these women paid a visit to the employer to find out who was getting the 401k and life insurance proceeds. Not sure how they played out as attorneys were quickly involved, but I know there was lots of yelling initially.
  • If you cannot remember the last time you looked at your legal documents, well, same story – time to dust them off. I just picked up a copy of a client’s Will, POAs and Healthcare Directives.  It has been well over a decade since they were updated and as part of us working together we will review them before they head to the attorney for updates.
  • The least fun item on this list is to visit SSA.gov and verify your Social Security information is all correct. You definitely want to do this before you need to start drawing it.
  • Finally, since I officially declared it spring last week, it is time for spring cleaning.  But instead of spring cleaning you may want to get some things organized. Click here for a pdf of my Organizing Your Financial Life file.  Or, as I call it – the Hit by the Bus file. This is where you write out all your important contacts (lawyer, doctor, CPA), where certain documents are (will, insurance policies) and share it with your loved ones.  If you start working on it now you can knock a little bit out month by month.  Think of the fun conversation starter this will be for Thanksgiving when you impress your family with how organized you are!