Effective Financial Planning For Any Economy

10/20/2009

 Effective financial planning is always a goal for everyone.   After all, who wants to either lose any of their hard-earned money and/or pay more than what is required by law to the IRS every year?  In a down economy, these thoughts often escalate from 'back burner' things you ‘should’ do… to 'center stage' emergencies.  

But what can you do to protect your assets?   There are lots of options, but here are two good places to start:

1)  Make sure that all your advisors are communicating with each other.   Ask yourself,  "How often does your tax preparer or CPA communicate with your financial advisor or stock broker?"  For most folks, unfortunately, it is, at most, only once a year… maybe during tax season.  If there is no communication between the person who is making you money and the person who is saving you money, who do you think gets hurt in the middle? You do.  And there is a third advisor that also needs to be in this open communication process… your estate attorney.  Not everyone may need an estate attorney.  However, over 70% of retirees are currently without any type of estate plan or even a valid will.  Without communication between these three professionals, there is confusion... and nobody wants that in their estate, especially during their retirement years.

2)  Safety is also a big concern. Many people are unaware of the amount of risk they hold in their portfolio. When retired, the preservation of principal is much more important than a high rate of return. There is no longer income to offset market losses and you have to live off of what you have accumulated. There are safe vehicles out there, such as fixed annuities, which provide upside potential with no downside risk, along with a stable rate of return.

Most importantly, whether it is your investments, tax situation, or estate plan, find out what you have!  If you don’t have a plan, the government definitely has one for you… and nobody wants to start planning in that 12^th hour.  Nobody cares (or should care) about your financial plan more than you!

Editor’s Note:  This article was submitted by Darian Andreson, President of Senior Tax Advisory Group.   For additional information, contact them at 719-596-4844