In the Spirit of the Holiday Season,
Here Is A List of Early New Year’s Resolutions and Fun Things To Do in 2010!
1. Remember, cash flow (income versus expenses) is the key to long-term financial success. If you are gainfully employed you should be saving 15% to 25% of your income. If you are retired or not fully employed and are drawing on your investment portfolio, your total annual withdrawals should be 3% to 5% of your portfolio value or less. If your savings rate is low or withdrawal rate high, review steps to increase your employment income or reduce your expenses.
2. Insurance is the foundation of sound financial planning. Home and auto insurance, umbrella liability coverage, health insurance, life insurance, disability and long-term care insurance all warrant regular review and updating. Update your home insurance for increased real estate replacement values and any special riders for valuables. Life, disability and long-term care insurance should be managed with a well defined strategy.
3. Calendar year 2009 has shown a dramatic recovery in stock market prices. Investors are still bruised from 2008 and pessimism is pervasive. Remember that the stock market is a leading indicator and will turn up before business, consumer and investor attitudes improve. The decade ending 2009 has been a major disappointment for investors but the pendulum can swing back more favorably for the decade ahead. Broad diversification will be well rewarded and realistic expectations for long-term returns (high single digits for a diversified portfolio) are a must.
4. Are there any family or personal changes that might prompt a review of your Beneficiary Designations on life insurance policies (both employer provided and individually owned) plus IRA accounts and employer retirement plans? How about Power of Attorney, Will and/or Trust documents? Changes of address or telephone numbers of people listed in your Health Care Power of Attorney document?
5. Do your children or grandchildren have employment income that could be used for a Roth IRA or Traditional IRA contribution? If applicable, have you funded 529 college savings plans for the calendar year for children or grandchildren?
6. Do your family members know where to locate important personal financial papers and how to contact your professional advisors in case of an emergency?
Have a safe and happy holiday season. Take good care of yourself. Best wishes for a healthy and prosperous New Year in 2010!
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