How to Move From Financial Detour to the Straight Highway

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February 25, 2019
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Coming from sunny southern California, there’s nothing quite as nice as an aimless, leisurely drive down the coast. As delightful as that is, it’s not a metaphor for life. Life is complicated and moves fast. It’s easy to get sidetracked. That’s why when it comes to any of your goals, especially financial independence, a clear vision of what you’re working towards and a developed idea of the best way to get there will keep you in route to your goal. Many folks have a general idea of where they want to go. They want to be fiscally responsible, perhaps investing in a home and saving for retirement while still prepared for the financially unexpected. However, 1 in 3 Americans have less than $5,000 saved for retirement and only 16 percent of those surveyed had more than 15 percent of their income saved. We know that most people have good intentions. So why do their actions take them so far away from their goals?

It all comes down to that lack of a map – not having a well-defined goal and detailed route to get there. Yes, it’s good to know that you want to be fiscally responsible, but if you don’t have a detailed definition of what that means, how do you know when you’ve achieved it? What are you saving for? How much do you need to save for retirement and how much do you need in your emergency fund? What other financial goals do you have, and which ones take priority? Lacking those details may make it easier to get distracted by impulse purchases or detoured by a financial commitment that might not be the best for your budget or your long-term financial goals.

Once you have the destination, then you need to determine the most direct route to get there. Do you have a distinct budget for all your needs and your goals? Are you going to have a monthly amount deducted from your account to your savings goals? Have you considered the influences that work against your goals and what you might do to counter them? Having a distinct plan doesn’t mean that everything is settled. Circumstances may arise that distract or reprioritize your goals. Having a definitive plan, though, can help you recalibrate your course and prevent you from being shifted away from your goals long-term.

The road to your financial independence is oftentimes anything but direct. Between relationships, families, career, health and everything in between, it’s easy to lose sight of your goals. Yet, by thinking things through and creating a detailed plan, we can stay on course. Despite every fork in the road, every decision that tempts us away from our goals, we are able to remember what we’re saving for and the right steps we put in place to get there, which makes it easier to stay on course to our financial independence.

  1. https://www.cnbc.com/2018/08/27/1-in-3-americans-have-less-than-5000-dollars-saved-for-retirement.html
  2. https://www.cnbc.com/2018/03/15/bankrate-65-percent-of-americans-save-little-or-nothing.html

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By
Gonzalo de Leon Plata
September 27, 2017

When you put the words, “retirement,” “investments” and “risk” in the same sentence, most of us will automatically think about market risk, you know, the possibility for an investor to experience losses due to overall performance of financial markets1.  According to the 2014 Annual Retirement Confidence survey, 88% of retirees are worried about maintaining the same standard of living.  While Market Risk is a very real reason to worry, there are other risks that may throw a wrench into your financial plan. This time we will discuss the possible need for Advance medical care, how much it could cost, and how to be ready for it.

The Risk: There is a 50% chance that any of us will need some form of Advance Medical Care2.  In other words you or your spouse WILL need Advance Medical Care. The risks are so high and yet most investors don’t prepare of it.

The Cost: Know the potential damage. The numbers don’t lie. The average cost of long term care in the US for Nursing Home Care for a Semi -Private room is a whopping $225 per day3.  The average stay in a Nursing home is 892 days.  For easy math you are looking at a $200,000+ cost above and beyond your living expenses.

The Solution: Use small dollars to cover big expenses. Get life insurance with living benefits.

One solution that is becoming more and more popular is getting a life insurance plan that can be used to cover Advanced Medical Care. Some insurance companies offer something called Living Benefits Riders. These riders allow you to “advance” a portion of your death benefit if certain conditions are met, such as Terminal illness, problems with the Activities of Daily Living  and life threatening conditions.

Building a Financial Plan that can withstand the risks of life is complicated.  Make sure you hire a Financial Coach to help you prepare for the unknown. Thinking outside the box may be a way to protect your golden years.

[1] www.investopedia.com/terms/m/marketrisk.asp

[2] http://www.aaltci.org/long-term-care-insurance/learning-center/probability-long-term-care.php

[3] www.genworth.com/about-us/industry-expertise/cost-of-care.html#

By
Jeff Motske, CFP®
November 9, 2018

I personally believe that one of the advantages of doing well financially is to be able to “give back” to causes that are near and dear to your heart. However, when we feel passionate about a cause, the emotional pull can tempt us to financially overextend ourselves. With some forethought, though, you can utilize creative measures that allow you to be generous without breaking the bank.

Your Time

Before you pull out your checkbook, perhaps consider getting your hands a little dirty. Whether it’s cleaning trash from the beach, working at a food pantry or assembling packages for our troops stationed far and wide, nonprofit organizations are powered by people. Even the simplest volunteer work can make a significant impact on an organization in need.

Your Talent

Some of us have specialized talents and skills that can be of value to a charitable organization. If you have an accounting background, perhaps you can offer your services to a nonprofit close to your heart. If you run a landscaping company, you can choose to donate your services to your alma mater. Such specialized services can be of great value to an organization and not make much of a dent in your personal finances.

Your Treasure

Just as there are different types of non-profit or charitable organizations, there are also different ways to financially contribute to them. Many of us are familiar with direct contributions, donations that may qualify to be deducted from your income tax. You could also contribute via donor-advised funds, which allows you to make charitable contributions to specially designated funds at a specific charity, receive a tax benefit from the contribution and recommend grants to be funded by the charitable fund account. Another option is to donate appreciated stock or appreciated real estate, which provides a significant tax deduction. Some choose to leave a charitable donation after they pass via a trust  These gifts in trust can be tricky, so it is advisable to meet with a professional to avoid any issues. Additionally, there are those who prefer to utilize charitable gift annuities, which allows an individual to receive a fixed income after donating money, securities or real estate.

There are as many worthy charitable organizations as there are stars in the sky. When your funds won’t allow you to do more, there are always other ways to “give”. Doing so thoughtfully and creatively can ensure that everyone benefits.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

  1. https://www.nptrust.org/what-is-a-donor-advised-fund

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