Updating your retirement strategy

It’s probably sitting in your email right now. A notification that one of the friends in your Facebook network has updated their status. Or one of your former co-workers is announcing their new job on LinkedIn. As our lives change with new jobs, new family members or new education levels, updating your strategy for preparing for retirement to fit your changed financial future may be forgotten.

Here are few times in life to stop and review your strategy:

Getting married

• Update your beneficiary for any life insurance or investments
• If marriage comes with house or children, review life insurance
• Combining finances? Put together a list of debts and credits into financial statement for developing new retirement preparation strategy
• Collect workplace retirement benefits information

Buying a house

• Review and  update life and disability insurance

Adding to your family

• Review and update life and disability insurance
• Identify any employer benefits to cover child-related costs, such as adoption reimbursement, on-site child care, 529 college savings plans
• With money being pulled in many directions, if you are eligible for a workplace retirement plan, try to invest at least to the full employer match

Changing jobs

• Consider options for previous retirement accounts and contributions

Saving for college

• Since it was introduced in 1996, the 529 plan has been a popular way to save for college on a tax-deferred basis. 529 plans differ in each state, but can provide for tax-free qualified withdrawals. Contributions are made after tax, but are considered gifts and can be deducted from federal taxes. Some parents now encourage family and friends to send their children’s gifts in the form of deposits to the 529 plan.
• Pre-paid tuition plans are available in many states. The plan allows for payment of future tuition at current tuition prices. 
• A Coverdell Education Savings Account allows for contributions of $2,000 per year for a beneficiary under 18. There are limitations on who can contribute and the funds must be used within 30 days of the beneficiary’s 30th birthday. For more on Coverdell ESA rules, see the Internal Revenue Service’s link.

Starting a business

• Create a benefits program for employees
• Insure your family against loss of business

Taking care of aging parents

• Work with your parents to learn their budget, income sources and estate-planning
• Help them establish a power of attorney, living will and advance health care directives
• Review health care and long-term care options

Divorce

• If your ex-spouse was the beneficiary on life insurance or retirement plans, that may need to change
• If you created an estate plan, those plans may need to be updated

Retirement

• Develop an understanding of how Social Security, inflation, Medicare and health care costs will impact your retirement plans.
• Determine your retirement account withdrawal strategy.
• How will required minimum distributions affect your retirement? 
• Retirement checklist items: apply for Medicare at least three months before you turn 65; determine with a financial professional when you would receive the greater financial benefits from Social Security; consider the advantages of moving your money from a tax-deferred investment and into a Roth or traditional IRA

Death

• Store all your important financial documents in a safe place
• Learn more about the household finances of the deceased and the possible tax implications
• Consider contacting a financial professional knowledgeable in estate and inheritance topics.