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Guarding Your Wealth for Seniors
New Year Financial Tune Up for Seniors
By Jeffrey D. Voudrie, CFP
Dec. 31, 2005 - While you’re making your New Years’
resolutions, don’t forget to give your financial house an annual
tune-up. As the old saying goes, an ounce of prevention is worth a pound
of cure, and few adjustments now could save you thousands of dollars,
not to mention some major headaches, in the months and years to come.
The first step in any financial tune-up is to
reassess your financial goals and make sure you’re on track to reach
them. For instance, has your target date for retirement changed? Has a
spouse had a career move that affects how much you have going into
savings? Are you planning any major purchases this year, such as a
kitchen remodel or buying a car?
If you depend on your investments for income,
perhaps your cost of living has increased and you need to find a way to
increase your returns. Maybe you’ve downsized your home and your income
needs have decreased. Whatever the case, now is the time to determine
what your current needs are and how to adjust your investments to
improve their ability to achieve your goals.
The second step of your financial tune-up is to
make sure your estate planning and insurance policies are up-to-date and
in order. I know it’s not a lot of fun to do this, but believe me, if
you could talk with folks like I have, who didn’t have their houses in
order and are paying the price, you’d gladly take the time to do it now.
And it’s not as bad as you think.
Read over the estate documents you have, such as a
will, living trust, powers of attorney, etc., and make sure they reflect
your current wishes and situation. Don’t have the right documents in
place? No time like the present to take care of it. Not sure what you
need? Just ask me.
Review your insurance policies, making sure to
verify your liability coverage. For instance, most drivers don’t carry
enough uninsured motorists coverage. And after all the hurricanes of
2005, make sure you know exactly what is covered in your homeowner’s
policy. If you have questions, make an appointment with your insurance
agent and know for certain. Don’t forget about reviewing your long-term
care and disability policies as well. And if your needs for life
insurance have changed, maybe it’s time to cancel some policies or up
your coverage.
If you’re still employed, talk with your human
resources department and make sure you’re maximizing all available
benefits. Max out your 401k and any matching contributions from your
employer. See if there are ways to lower your health insurance costs.
Some even offer tuition reimbursement.
The last major step of your financial tune-up is a
close inspection of your investments. If you have mutual funds, check
out your funds at
www.Morningstar.com. By entering each fund’s symbol, you can
quickly measure your fund’s performance, rating, how they compare to
similar funds, and whether your fund has had a recent management change
that could affect performance.
You want to be in funds that have
consistently performed well over the long haul, not just
one-year-wonders. If you happen to own some funds that are laggards,
then fire them and replace them with higher-ranked ones.
When determining what funds to have, don’t just
look at performance, but also look at diversification. If you own
several funds, but they’re all invested in large-cap companies, that’s
not proper diversification. You should spread your eggs among several
different categories, types and strategies. And don’t forget to make
sure your company retirement account isn’t 100% in company stock.
Make sure you’re not too over-weighted in any one
category. For example, energy and international stocks did very well in
2005. If you have hefty gains in those holdings, you might want to
rebalance some of those profits into other categories.
An annual financial tune-up might only take a few
hours, but its benefits could last a lifetime. If nothing else, you’ll
gain the peace of mind that you’re on track to reach your financial
goals and you have your estate in order. If you uncover some problem
areas, you’ll be able to make changes now before you have to pay for
costly mistakes.
If you have a specific question or would like more
information give me a call toll-free at 1-877-827-1463 or go to
www.guardingyourwealth.com. You can also reach me by email at
jeff@guardingyourwealth.com.
About Guarding Your Wealth:
“Guarding Your Wealth” is a
nationally syndicated weekly personal finance column written by Jeffrey
D. Voudrie, CFP. Mr. Voudrie is the President of Legacy Planning Group,
a private wealth management firm that employs sophisticated proprietary
strategies designed to protect and grow its clients' investments. Please
visit his website,
www.guardingyourwealth.com to read past articles under the Guarding
Your Wealth Article Archive.
Guarding Your Wealth for Seniors are
a collection of columns by Voudrie that deal with issues of particular
interest to senior citizens. Click here
for all columns.
In addition to being a nationally
syndicated columnist and Certified Financial Planning Practitioner, Mr.
Voudrie provides personal, private money management services to clients
nationwide.
Looking for an energetic expert who
is passionate about financial and wealth management? Mr. Voudrie is an
excellent speaker who will excite and inspire your audience. Mr. Voudrie
is available for a limited number of speaking engagements, television
appearances and radio talk shows. For booking information, email e-mail
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