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Burning Questions*

What important life events are you facing right now? Our Burning Questions address a variety of scenarios to help you make "cents" of your current Life Stage issues.

I'm thinking about my retirement investments. How long will it take for my nest egg to double?

Use the Rule of 72 to get the answer quickly. Here's how it works:

Divide 72 by the rate of return, and the answer is the number of years it will take to double your money, assuming annual compounding. For example, if the interest rate is 6%, it will take 12 years for your savings to double (72/6 = 12).

You can also use the Rule of 72 in reverse. For example, if you want to double your money in eight years, divide 72 by 8. You will need to earn 9% compounded annually (72/8 = 9). So if you have $5,000, and you want that to grow to $10,000 in eight years, you'll need an investment rate of return of 9%.

Learn more about achieving your Retirement Readiness.

I will be changing my name soon. Will I need to update my Social Security information?

Yes, you will need to update your card and your employee personnel records after your name changes. By following a few easy tips, it's a simple bit of paperwork for most people. First, complete Form SS-5, available from the Social Security Web site or by phoning 1-800-772-1213. You will be required to provide proof of your old identity, as it appears in Social Security records, and your new identity. Examples of acceptable documents include a marriage certificate, a divorce decree, or a court order.

When you receive your corrected card, take it to your employer and have your personnel records updated. Be aware that the Internal Revenue Service (IRS) is increasing their diligence on preventing identity theft. As a result, they have implemented new regulations on employers. When you notify your employer of your new name, the employer is required to view your new Social Security card before they make changes to your personnel records. Additionally, they must photocopy your new card and keep the copy in your files.

Learn more about the financial responsibilities of Marriage and Divorce.

My husband and I are both in our mid-20s and were recently married. What should our first financial steps be?

First, you'll have bank accounts to share and auto insurance to combine. You'll need to choose medical benefits and decide if it's time to possibly buy a home. A dual income is great for lowering debt and buying a house. Next, a beneficiary review of your current life insurance policies and 401(k) will help ensure that both of you are protected. A qualified investment planner can help make sure you're both adequately prepared with retirement strategies, life insurance, and tax planning.

Learn more about the financial responsibilities of Marriage.

My wife and I just had a baby. What general guidelines do we need to manage our money?

You'll want to use the same general guidelines for smart money management that you did before you had a child. In fact, it's more important than ever. Try to live within your means, and avoid the temptation of credit-card dependency. Invest the maximum in your 401(k) or other tax-deferred plans. If possible, take advantage of your company's flexible spending account to pay for child-care expenses. Also, make sure that you have sufficient life and disability insurance to cover unforeseen events, such as premature death and disability.

Learn more about family financial concerns when having a New Baby.

We have young children. What is the best way to save for our family's future educational needs?

If you're years away from sending your children to a university, setting aside money for that day is one of the best gifts you can give them. Graduating free of loans allows them to pursue their dreams unhindered. If you're only able to pay for a portion of their education, you can still take advantage of prepaid state tuition plans, which help lock in expenses and reduce the burden when the time comes. For other situations in between, a combination of state assistance, scholarship funds, and other sources can make the possibility of a college education more real than you may have thought.

Learn more about saving for College.

I'm considering opening up some type of investment portfolio for the first time. What do I need to do to plan for my future?

That's a great question. By now most young people know that they can't rely solely on Social Security benefits to help pay for retirement and that pensions provide perhaps only half of one's pre-retirement standard of living. Employer-offered 401(k) plans are a great way to add to your nest egg, but that alone won't do it either. Consider other options like real estate, annuities, life insurance policies, mutual funds, and other smart, tax-advantaged opportunities. The key is to pay yourself first, frequently, and regularly.

Learn more about pursuing your Retirement Readiness.

Our kids are grown and out of the house, and we are just beginning to think about what living in an empty nest means. What do we do now?

To begin with, you should look out for yourselves again. That means reviewing the planning you did over the years – the insurance policies you established long ago and the retirement plans you've put together since then. Your life has probably changed in ways you never expected. Maybe you have new dreams or new demands (your health, perhaps) that require attention. The important thing is that you take stock of your financial preparedness and make the necessary adjustments.

Learn more about how to enjoy your Empty Nest.

I've always lived in rental properties and would really like to own my own home. How can I make that dream come true?

The trick to home ownership, whether you're a novice or a veteran, is integrating this new commitment with your existing financial plans. If you're thinking about a new home, you may also be planning a family, or your existing family may be outgrowing its present living space. You need to understand the differences among the various mortgage opportunities and how they can best exist with the investments and policies you may already have chosen.

Learn more about what to consider when Buying a Home/Mortgage.

Over the years I've accumulated a fairly sizable estate. How can I pass along my assets to my family without burdening them with taxes?

Many believe that the purpose of sitting down and establishing wills, trusts, and other strategies is to reduce taxes after your death. While lessening the tax burden on your survivors is a nice result of good planning, it's not the only purpose. Estate planning aids your retirement strategy by helping you allocate your assets, allowing enough money to live on while also passing along a portion of your estate to your family members. Getting timely financial, tax, and legal advice is the key.

Learn more about how to protect your Family Legacy.

I've been thinking about changing careers. What do I need to consider when transitioning from one job to the next?

Start with health-care coverage. There could be a time gap between the end of one job and the beginning of another. If your spouse's job doesn't provide benefits, do you understand the steps necessary to continue your family's protection? Next, consider how your new employer's compensation package compares to what you had before. What about the 401(k) you've been contributing to for the last five years – do you know what happens to it after you leave? These are just some of the questions that you should be asking yourself when considering a career change.

Learn more about how to approach Career Changes.

I'm thinking about selling my small business. Everyone with whom I talk tells me that I need an exit strategy. What does that really mean and why is it important?

An exit strategy helps ensure that your vision for the company and its employees is carried out. It can help establish a fair value for the company and, if appropriate, make sure it is placed in the right hands – not just the closest or most assertive. It also helps guarantee that everyone associated with the leadership of the company, including family members, is treated fairly.

Learn more about the important steps involved in Selling a Business.

I am in the process of getting divorced. Should I be consulting a financial advisor as well as my attorney?

In a divorce, people often turn to attorneys for assistance rather than other advisors who may have a better understanding of the couple's financial situation. Attorneys do play an important role, but a financial planner can help make the transition smoother and less antagonistic. An understanding of your financial situation can help both parties get back on track financially when the divorce is final.

Learn more about the financial impacts of Divorce.

*Responses to Burning Questions are general in nature and should not be considered tax or legal advice. You should consult your own tax advisor or legal professional for more complete information.


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Last Updated: 12/14/2017