For seniors, New Year’s resolutions tend to center around hopes for good health, more time with their grandchildren, and better financial choices to protect their quality of life. Here are a few pointers that we think are key to a realistic set of financial resolutions.
Make a budget. For most Americans, making a household budget is a lost art. It’s a shame, because this simple tool provides the information that has the potential to impact saving for retirement, and managing resources during retirement. Start by examining your cost of living over the last six to twelve months. Knowing how much money it costs you and your family to live may surprise you and may lead to some immediate changes. If you have not yet retired and are not using a budget, this is a great time to begin.
Assess your current investments. Regardless of the size and health of your portfolio, you need to take a close look on at least a quarterly basis. Here are questions to ask yourself or, if you are working with a financial professional, ask your advisor:
- Are your allocations still balanced for your goals?
- Are you taking on a comfortable amount of risk?
- Are you paying too much in fees?
- Do you have significant gains or losses to lock in for tax purposes?
If you are not happy with the answers, consider asking for a second opinion.
Review your estate planning essentials. A few fundamental legal documents can set out a clear direction for your estate. This will save your loved ones unnecessary headaches, paperwork, or legal battles in their grief. These fundamentals include a durable (and healthcare) power of attorney, a living will, HIPAA privacy authorization forms, and a last will and testament. Call our office for specific concerns if you have minor children or especially complex estate planning needs.
Evaluate your insurance coverage. With healthcare expenses during retirement projected to average $220,000 per couple currently over the age of 65 (beyond what Medicare will cover, not including nursing home expenses) according to a 2014 study, a gap in your planning could quickly sink your family’s financial well-being. Audit your policies to uncover gaps and overages and shop rates with a variety of carriers.
Maintain your retirement plan. Remember that you should always pay yourself first and continue to save with your future in mind. Take advantage of and maximize employer matching programs and try to max out your retirement accounts.
The New Year is the perfect time to review your financial plans, and to re-evaluate and/or create new financial goals. Keeping your financial resolutions throughout 2015 will help keep you on the road to achieving your financial objectives.
If you have any questions about these or related matters, call our office at 516-307-1236.