Review Financial Strategies
After Life Events by Marisa Otto, AAMS
marisa.otto@edwardjones.com
I
f nothing ever changed in your life, you could proba- bly chart your financial and
investment strategies and then forget about them. But your life is full of changes — and many of them will require you to take a new look at how you save, invest and protect your family. Let’s run through some of
the most common milestones in life and see what sort of moves you might make in response:
MARRIAGE—It sounds obvious, but once you’re married, you have to stop thinking in terms of “one” and start thinking of “two” in most aspects of your life — includ- ing your finances. For example, if you are an aggressive investor but your spouse is more conservative, you both may need to compromise and choose an investment strategy that’s “down the middle.” At the same time, you’ll want to set some common goals, such as saving enough for a down payment on a home.
CHILDREN— When you have chil- dren, you have to protect them today — and invest for their future. Your first step, then, might be to purchase life insurance. You can typically buy a term life policy at very reasonable rates. The exact amount of coverage you need depends on your individual situation, but you’ll probably want at least enough to pay off your mortgage and send your children to college
sult with your tax advisor.
REMARRIAGE—If you ever remarry, you may need to change the beneficiary des- ignations on your 401(k), IRA and other investment accounts. You also may need to work with your attorney to revise your will, living trust and other docu- ments related to your estate plans.
should anything happen to you. And to protect your income, you might want to consider disability insurance. Finally, it’s never too soon to start saving for college. You might want to consider opening a tax-advantaged account, such as a Section 529 college savings plan.
JOB CHANGES — When you leave a job, you may well have an important decision to make about your 401(k) or other employer-sponsored retire- ment plan. If you don’t need the money right away, you might want to avoid cashing out your plan, because you’ll likely face an immedi- ate tax bill — and you’ll have fewer resources for retirement. Consequently, you may want to roll your 401(k) to an IRA or your new employer’s plan, if it allows such transfers. Before taking action, con-
adsales@outandaboutmagazine.com
RETIREMENT—For many decades, you saved and invested for your retire- ment. Once you retire, however, you should move away somewhat from the
“accumulation” phase and start think- ing instead of how best to manage the money you have accumulated. That means you’ll need to decide when to start taking Social Security and how much to withdraw each year from your various retirement accounts, such as your 401(k) and IRA. A pro- fessional financial advisor can help you develop a withdrawal rate that’s suitable for your individual situation. You’ll encounter many important
events on the road of life. By making the right financial moves along the way, you can help make the journey more pleasant.
~ Marisa Otto is your local Edwad Jones Financial Advisor. Her office is located at 275 Tennant Ave., Ste. 206A Morgan Hill CA 95037 Phone no. (408) 778 4400.
Out & About • May 2012 47
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