What would you do if you received a major financial windfall? Would you buy a new house or vacation home, give some to your family members, donate to your favorite charity, or take the trip(s) that you have always dreamed about?While most people will not receive a major financial windfall during their lives, it is not uncommon. You might receive a financial windfall by:
Atlanta Financial Blog
Four Financial To-Do’s for New Parents
We were recently blessed to welcome our second daughter, Elizabeth. This being our second, I think we are somewhat better prepared for how our lives would immediately change. These first few months are filled with joy and excitement (as well as exhaustion coupled with just trying to figure out what we are doing). While I have no advice on how to get your newborn to sleep on schedule, I can give you some advice on some financial matters all new parents need to address (and soon for some of these):
1) Add your new baby to your health insurance. Having a child qualifies as a life event, which allows you to make changes to your insurance plan outside of open enrollment. Most plans only give you 30 days from their birthday to add them to your plan. You will typically need a certification of birth from the hospital or a birth certificate.
2) Review current life insurance coverage and determine if it meets the needs of your growing family. If you lost one spouse’s income, would it be hard to continue your current lifestyle? Be honest with yourself – if you aren’t currently saving one of your incomes, you likely need more coverage. We generally always recommend term insurance for new parents, which can be quite inexpensive.
3) Update your will, beneficiaries, and withholdings. Your estate planning documents need to be updated to include your new baby. This will also involve updating any beneficiaries on current insurance policies and retirement plans. You also may want to consult your CPA to see if you should change your withholding elections as you likely will qualify for the newly updated $2,000 child tax credit (per child).
4) It is never too early to start thinking about college saving. Estimates range about what college will cost for a child born this year, but expect public, in-state college to cost $150,000 to $200,000 by the time your newborn reaches 18. I believe 529 plans are the best way to save, and starting early means you will need to save a lot less (and could help your child avoid burdensome loans later in life).
I can’t guarantee following these steps will help your child sleep through the night, but you should at least rest easier knowing your family’s financial future is on a solid foundation. Stay tuned for more tips on how to build the financial future for your family that they deserve. I would love to discuss my approach to each of the above or answer any questions you have!
Chris Blackmon can be reached at 770-261-5386 or firstname.lastname@example.org.
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When I first sit down with prospective new clients to learn about their finances, one of the most common issues we come across is how spread out investment accounts are. We may have a brokerage account here, an IRA there and, very often, an old 401(K) or two still sitting in a previous employer’s plan. There are plenty of reasons why a 401(K) may be left behind with a prior employer – it could have gotten lost in the shuffle of beginning a new job, it may have just seemed like too much of a hassle to move the plan, or perhaps you took the time to roll the plan into an IRA but your employer made subsequent contributions you didn’t know about. These accounts, affectionately referred to as “orphans,” are becoming more and more common given the increasing frequency of job-hopping, especially among Millennials. So, who do these orphan accounts belong to and more importantly, what can be done about them?
Are you prepared to protect your assets in case you get sued? Hopefully this won’t happen to you, but the hard reality is that successful, financially secure individuals, especially business owners and professionals, are targets — a magnet for actions such as lawsuits and torts. For example, more than a third of physicians (34%) have had a claim filed against them at some point in their careers.1 For business owners, 36-53% of small businesses are involved in at least one litigation in any given year.2 Even if these claims or lawsuits are frivolous, they can be frustrating and potentially devastating to your financial well-being.
As human beings we may not be wired to make good financial decisions. Behavioral finance points to anchoring bias and recency bias are just two of the many factors that influence our decision-making. If not properly addressed, these biases can have a negative impact on the foundation and long-term success of your financial plan, and they tend to present themselves most strongly at the tail-end of a bull market.