financialforum
Financial Health
Preparing for next year’s tax season, reviewing your investments, and updating your estate-planning documents all should be part of your regular financial checkup. By Phil Dyer, CFP
Y
Schedule Your Financial Checkup
■ The middle of the year is a great time for a financial checkup; con- sider making time for one to ensure you are financially fit.
ou probably go to the doctor
for an annual physical or to the dentist at least once a year for a
teeth cleaning and checkup. Do you in- vest in regular financial checkups? Just as preventive medicine can help keep our bodies healthy, a little financial planning can go a long way. Consider the following tips for keeping
your finances in shape: Taxes: With the official tax season just
a few months behind us, most people don’t even want to look at their taxes until early 2011. However, proactive tax planning can save you a bundle, especial- ly for higher-income earners or retirees with significant investment portfolios, because of the expiration of many of the George W. Bush-era tax cuts coming next year. In addition, 2009 saw nearly 2,000 changes in federal and state tax laws — with 2010 on track to deliver a similar number of changes. Instead of waiting until after the first
of the year, consider “roughing-in” your taxes in September or October so you have enough time to make any necessary adjustments before the end of the year. Contact your CPA to set up an appoint- ment, or use last year’s software and this year’s numbers to get a ballpark idea of your tax situation. Investments: While it still is too early
to say exactly what will happen, there are indications taxes on capital gains and dividends will be rising significantly for those at the higher end of the income
4 4 MI L I T A R Y O F F I C E R J U N E 2 0 1 0
spectrum, which encompasses many sec- ond-career and retired military officers. In addition, as this column was being written, the stock market had rebounded nearly 80 percent from its March 2009 lows, which means your asset allocation might be out of alignment. After such a large run-up, do a mid-
year portfolio review. Pay particular at- tention to low-basis stock, mutual funds or exchange-traded funds in taxable accounts, and individual stock positions that make up more than 10 percent of your overall net worth. These positions might be ripe for reallocation. Estate planning: The Federal Estate Tax
expired at the end of 2009 — and is gone for 2010 — but it is scheduled to come back in 2011 at the same level it was in 2000 (a $1 million exemption and 55-per- cent top bracket). Congress might address this later this year, but the outlook for resolution is uncertain. Those with estates valued at more
than $1 million — including the value of in-force life insurance — should con- sider consulting a qualified estate-plan- ning attorney in the second half of 2010 to ensure their estate-planning docu- ments are up-to-date.
MO
— Former Army Capt. Phil Dyer, CFP®, is
deputy director, Benefits Information and Finan- cial Education. To find a financial planner near you, contact Garrett Planning Network at (866) MOAA-GPN (662-2476) or
www.moaa .org/garrett, or visit
www.moaa.org/financial center for other resources.
PHOTO: SEAN SHANAHAN
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