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6 Important Life Events that Need Financial Planning

6 Important Life Events that Need Financial Planning

Whether they’re good, bad, or somewhere in between, there are certain life events that should have a financial plan. According to a study done by the Retirement Income Industry Association (RIIA), households that regularly get advice before making a financial decision fare better than those who rarely or never get advice1. The study, done over a ten year period, looked at households who regularly sought financial advice with investible assets of $100,000 versus households who rarely or never received financial advice with investible assets of $100,000. The inflation adjusted difference in financial assets for households who regularly sought financial advice was $106,000. The difference in financial assets for households that rarely or never received financial advice was only $29,000 over the ten year period being observed.

Financial advisors can be particularly helpful, especially for these six life events:

1. Starting Your First Full-Time Job

Young, fresh out of school, and loaded down with student debt, the last think you may be thinking about when you get your first job is saving money. But now is your best chance to start saving for a comfortable retirement – your future self will thank you! A financial planner can give you guidance in contributing to your employer’s 401k, or help you look into other investment options like traditional or Roth IRAs. You may also be relocating states for your new job and a financial planner can discuss how your tax rates and cost of living will change with the move.

2.  Getting Married

Marriage most likely means you’ll be combining finances. To avoid unnecessary fights, we highly recommend visiting a financial professional. A financial advisor can help you divide rolls and determine who should be in charge of paying for what. They can also look at your employee benefits to make sure you’re both benefiting. There’s also the chance that a partner is bringing a financial responsibility into the marriage, such as a child from a previous marriage. Your advisor will be able to help you both navigate these obstacles and prevent any misunderstandings.

3. Having Children

Bringing a baby into the family is a joyous thing, and although it may seem lightyears away, we’re guessing one day your child will want to pursue a higher education. A financial planner can help you open a 529 account, for example, to help you begin saving for college. With college costs on the rise, starting to save early is crucial.

4. Receiving an Inheritance

While receiving an inheritance is not in the cards for everyone, many baby boomers are due to receive one over the coming years. Receiving a large amount of money at once can really shake up your financial situation! Will your spending habits change? What taxes will you have to pay? Where should you invest the money? Good financial planning from a professional will give you guidance on how to handle this sudden influx of money.

5. Dealing with Divorce

Divorce is a life event no one expects to go through, but if you do, it can tear both your mental and financial situation apart. In the aftermath of the split, a financial planner can help you look over your investments, new tax situation, estate plans and retirement accounts. You’ll most likely also need to change the primary beneficiary on your accounts, unless you want your savings going to your ex-spouse. It’s important to have financial guidance during this difficult time.

6. Reaching Retirement

Hopefully, you’ve been planning for this moment from as early as your 20s! But it is particularly crucial to meet with a financial advisor during your peak earning years, most likely when you’re in your 40s and 50s. During these years, mismanaging your assets could have an extremely detrimental effect on your retirement. A financial planner can help manage your portfolio and the risks you take to see you into a comfortable retirement.

Have you reached any of these important life events? If you have but have not yet met with your financial advisor, we urge you to do so. At Walsh & Associates, we strive to have all our clients prepared for these big moments in life. Never hesitate to give us a call if you ever have any financial concerns.


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