Today's Hack

What kind of missteps can put you at risk for financial disaster? What corrections and adjustments can you make now that could save you from a whole bunch of problems later on?

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Show Notes For This Episode

Other Retirement Facts:

How do you know if you’re flirting with financial disaster? On today’s episode of the podcast, Phil goes over four big areas where things can really go awry if they are not properly handled when it comes to your finances.

Do you have outdated legal documents? This is an easy fix to update your estate planning documents. Review them every couple of years, especially after there was a major life change. Make sure the will, trust, and power of attorney are all in order. If these are overlooked, you or your loved ones might have a big mess to sort out later on.

Are your beneficiaries correct? After a life event such as divorce, death, disability, dependent, or simply a new decade passes, it is vital that you review and update your beneficiaries. The beneficiary designations cannot be changed after you’ve passed. The beneficiaries listed on things like your life insurance will always go to them, regardless of what your will says. 

Are you flirtin’ with disaster when it comes to taxes? As there is increased government spending especially, it’s highly likely that taxes will go up. Do you understand what your tax bracket may be in retirement and how it impacts your financial plan? We have no idea what the tax liability may be years into the future. While taxes are low now, it’s worth taking advantage of the rates and talk with your advisor about how to plan for the future.

Is your portfolio using the classic 60/40 split, 60 percent in stocks and 40 percent in bonds? What is the reality of this portfolio and is this a wise decision for you? How are bonds doing right now? Don’t assume that because some use this guideline that it’s right for you.

A lot of these can be easy fixes and come down to having a conversation with your advisor. Updating these things can be relatively straightforward, whereas dealing with the consequences later on can cause all sorts of disaster for you or your loved ones.

Listen to the entire episode or click on the timestamps below to skip ahead to a particular issue.

1:28 – Outdated legal documents.

5:14 – Incorrect beneficiary designations.

9:14 – The tax time bomb.

13:09 – Sticking with the classic 60/40 portfolio, even if it’s not a good fit.

A Quotable Moment:

My role in this process is never to tell you what to do, it’s to show you pros and cons.

-Phil Putney

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