You may have heard that the Social Security Administration officially announced that Social Security recipients will receive a 1.6% cost-of-living (COLA) adjustment for 2020. Those increased payments will start in January 2020. The purpose of the COLA is to help the purchasing power of Social Security benefits keep pace with inflation. Congress first enacted the COLA provision as part of the 1972 Social Security Amendments, with automatic annual COLAs began in 1975. Before that, benefits were increased only when Congress enacted special legislation.
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 email@example.com.
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The holidays are the perfect time to express our thanks for your business and to think about those less fortunate. Please join us for our 11th Annual Holiday Open House and Toys for Tots Collection on Thursday, December 12, 2019, 11:30 am – 1:30 pm at our office – 5901-B Peachtree Dunwoody Road, Suite 275, Atlanta, GA 30328. Lunch will be served.
All of us at Atlanta Financial want to congratulate Harrison Fant on recently passing his five year anniversary at Atlanta Financial in September. Since joining AFA in 2014, Harrison has rapidly ascended through the different positions to his current position as Wealth Manager. Harrison has a unique combination of technical financial planning skills and the ability to present those complex concepts in easily understandable ways to all of his clients.
In working with my retired or soon-to-be retired clients, perhaps the most frequent question I am asked is “What is the best way to withdraw from my investment and retirement accounts in retirement in order to provide me my desired retirement income?” I believe they ask me this question because many of them have investments in a mix of different accounts with varying tax characteristics such as taxable investment accounts, IRAs, 401k or retirement plan accounts, Roth IRAs, and possibly real estate investments such as rental property. In addition to that, they may also have retirement income coming in from multiple sources and at different times such as Social Security income, pension income, and deferred compensation. If you are interested in increasing what you can spend in retirement and reducing the impact taxes have on your retirement nest egg, it is important to have a multi-year retirement income plan that takes into account the impact taxes will have on both your retirement income sources, and the withdrawals you take from your different investment and retirement accounts.