PAUL FAIN: PLAN FOR THE BEST, PREPARE FOR THE WORST
With year-end fast approaching, what is on your “to-do” list? Perhaps more importantly, what should be on your to-do list for the remainder of 2019? Plan for the best, prepare for the worst. At least annually, or as life circumstances change, review your various insurance coverages. For myself, a recent policy review has motivated me to update my life insurance and to help my children secure renter’s insurance for their apartments. Most health insurance plans include a wellness benefit for an annual physical – use it! Get on your general practitioner’s calendar as soon as possible. “An ounce of prevention is worth a pound of cure,” is as true today as it was when Benjamin Franklin made the quote.
Can you believe it? It is time to prepare for the holidays! Being financially prepared for Christmas, etc., reduces stress and your January credit card balance. Make your gift list and check it twice: who and how much? The typical household spent $1,000 on Christmas last year. There is still time to set aside funds for gift-buying, decorations, travel and big family meals.
Run a pro forma tax projection for the year. Will you owe additional taxes or be over-paid? Are there any fourth quarter changes you can make to reduce your projected tax liability or to avoid a tax penalty? Under current tax regulations, investors might look to “harvest” capital losses on an investment, or consider charitable strategies such as a donor-advised fund or a Qualified Charitable Distribution from an IRA (if over age 70.5).
Does this sound familiar? In July, my dynamic 91-year-old, mother-in-law fell, broke her hip and spent four weeks in in-patient rehabilitation care near her Kingsport home. Then, as Medicare benefits go, she was released and we brought her to our home. Unfortunately, she has limited financial resources to accommodate her limited physical capacity. For now, my wife is a 24/7 caregiver running on fumes.
No one wants to consider the possibility of infirmity, mental or physical incapacity, or loss of independence, but these challenges are an increasing probability at some point north of our 80’s. We love and adore our family members of the Greatest Generation, and we need your help. Talk to us. Share with us your hopes, wishes, and fears for senior care. Plan with us. Toward year-end, with many family gatherings, there are unique opportunities to have crucial conversations that can ultimately preserve dignity and relationships within the family.
This article was originally published in the Knoxville News Sentinel on October 10, 2019.
Do you have questions about financial planning, investing, or retirement planning? Send your questions to our Knoxville Certified financial planner Paul Fain or directly to Paul@assetplanningcorp.com!