3 Financial Planning Steps

November 8th, 2017
Marc Rittersporn/marc@integritt.com

Organization, efficiency and discipline are the three primary steps of financial planning. Organization is knowing where your money comes and goes. An efficient portfolio means a better chance of profits, and discipline keeps you on the right track.

Statistics tell us that the average credit card debt per person – including all people who pay off their cards each month – is over $5,500. Folks don’t have a handle on the big picture of their personal financial world.

If you are one of these folks, you should know what the steps of financial planning are and get started today, either on your own, using resources on the Internet, or by hiring a financial planner.

The first and most important step of financial planning is organization. You can be a lot closer to your financial goals in life by organizing your finances and understanding money flows, both inflows (like your paycheck) and outflows (bills).

If your financial life isn’t terribly complicated, an Excel spreadsheet may suit your needs perfectly. However, using something a little more sophisticated, such as Mint, Quicken or other online budgeting tools may become necessary, as you and your financial life continue to evolve. There are a million ways to approach organization, but the “how?” is nowhere near as important as “when?” Of course, the answer to when to start organizing is now.

Whatever method you choose, once you set up the system you should enter historic information as far back as 12 months (if you have it). This requires digging out the old bank, investment and credit card statements. It’s not as intimidating as it sounds. In today’s connected world, you can simply download the transaction history from your bank, investment or credit card companies, and import it directly into your Mint or Quicken file. You still need to go through things, but much of the data entry is done for you.

If you don’t have the time, the facility or the patience to enter this historic information, don’t give up. Tracking your information from today forward is valuable as well. Think about it: In a year, you’ll have 12 months’ worth of history in your system.

As you generate this history (or review the old history), patterns of your spending habits emerge. Perhaps you spend much more on golfing than you realized, or maybe your home decorating expenses were greater than your mortgage payments over the last year. Each of these patterns helps you to understand where your money goes. Once you know that, you can begin to control it.
Quicken or Mint.com also organizes your investments, which takes us to the next step: efficiency.

If you have a couple of old 401(k)s from former employers, you can look at all investment accounts from a top-down perspective, using these tools. For many folks, it may be the first time you see all your investments in one place.

This is when you adjust your allocation for a more efficient portfolio. You might think your investments were diverse enough but find that you bought the same investments in multiple accounts. An efficient allocation is about spreading your money across many different broad asset classes.

Now we’re into the place where the rubber meets the road. After you organize everything in an efficient manner, you need to maintain this organization over time. This requires discipline.
You need to balance your checkbook at the end of the month and keep your information up-to-date when you receive the credit card and investment statements. The automated tools help a lot, but you can’t just let it go on autopilot. You need to sort through the information to understand what’s going on with your cash flow and investments. You might need to change your spending habits or rebalance your investments if they get out of line.

But what takes the most discipline is maintaining your investment allocation as planned when the market is very volatile. You might be tempted to pull out of the market after a big loss or start buying in when the market has a huge run-up. Keeping you disciplined is quite often the major benefit of having a financial advisor, who can help you maintain the proper long-term perspective of your investment allocation and not let emotions rule the actions.

Identity Theft: Be Prepared! Be Proactive!

November 2nd, 2017
Marc Rittersporn/marc@integritt.com

The 2017 Identity Fraud Study, released by Javelin Strategy & Research, found that $16 billion was stolen from 15.4 million U.S. consumers in 2016. In the past six years, identity thieves have stolen over $107 billion.

Sure, technology makes our lives easier, creating the opportunity to complete tasks quicker and access information that previous generations didn’t even know was available. But it also opens the door to an unimaginable number of threats to our lives and businesses.

Identity theft and cyber-attacks are rampant almost every day. How can you fend off intrusions that might cost you agonizing hours – not to mention a lot of money – to correct?

What can you do to safeguard identity, credit card numbers and account information online? For starters, common sense goes a long way and better you start out more suspicious than trusting when it comes to Internet safety.

When shopping online, for instance, it’s often safer to stick to the well-known retailers such as Amazon and Walmart or websites that use established third-party verification services such as VeriSign and TRUSTe. But remember that in recent months even the biggest, presumably most secure names in consumer services and retail suffered hacks: Target, JP Morgan, United Parcel Service, Dairy Queen, Staples and so on.

You and I can’t protect multinational corporations, but we can do more to protect ourselves. Things to protect your identity:

• Don’t use the same password for multiple websites.
• When accessing Wi-Fi in public places, realize that scammers can monitor what you access online.
• Use a reliable antivirus and, if possible, firewall software to thwart hackers.
• Check your credit report for suspicious activity. The Fair Credit Reporting Act guarantees you access to your credit report every 12 months via a website called AnnualCreditReport.com.
• Regularly review your bank and credit card statements. People often discover identity theft long after the crime took place. The quicker the investigation starts, the likelier you are to minimize your losses. If you become a victim of identity theft, call your bank and credit card companies immediately.

Small steps will go a long way towards protecting your identity.

Acquaint Your Grown Children with Financial Affairs

October 25th, 2017
Marc Rittersporn/marc@integritt.com

Many parents may feel it is unnecessary to inform their adult children about their personal, financial affairs. However, as your children grow older, it can work to your advantage. —and that of your entire family— to share with them key financial, medical, and estate planning information. An awareness of important information, and knowing where to locate relevant documents, can help your grown children take appropriate and timely action if a sudden death or catastrophic illness were to occur. Consider these issues:

• Health Insurance. If you are age 65 or over, your adult children should be aware of any and all health insurance policies, as well as Medicare materials. There may be “Medigap” policies that go beyond the basic care coverage provided by disability income insurance policies and long-term care (LTC) policies. You may benefit greatly in an emergency if appropriate procedures are followed and necessary forms are submitted in a timely manner.

• Living Will. This document specifies an individual’s preferences regarding the administering or withholding of life-sustaining medical treatment. Under many state statutes, a patient must be considered “terminal,” “permanently unconscious,” or in a “persistent vegetative state” before life support can be withdrawn. Copies of living wills should be made available to anyone who would be involved with the care of either parent, and the originals should be kept in a safe, readily accessible storage place.

• Health Care Proxy. Similar to a living will, this instrument allows you to appoint another person as your “agent” to make health care decisions in the event you become incapacitated and unable to make your own decisions. Specific directions regarding medical procedures to be administered, withheld, or withdrawn can be made within the document. A copy should be readily available to the “agent.”

• Durable Power of Attorney for Property. If you become disabled, who will manage your financial affairs? With a durable power of attorney in place, an individual or bank may act as an agent to oversee your financial affairs. Your grown children should know what steps have been taken to ensure the competent direction of your affairs, should the need arise. However, your children’s actual involvement with your affairs can be limited, if so desired.

• Wills. Do they exist and are they up-to-date? The exact contents can be kept private, but the location of your will should be known by all family members.

• Trusts. Wills can accomplish much in the direction of your estate after your death. However, a trust managed by yourself, or a trustee of your choosing, may meet your planning needs, including potentially protecting the estate from taxation. Trust documents should be kept with wills for ease of access, and you should discuss pertinent terms with those who will be involved. As your children reach adult age, it may be time to select a responsible child to serve as a trustee in the event of your death.

• Life Insurance. Life insurance is typically purchased to provide cash to help cover mortgages, liabilities, expenses, and estate taxes, as well as to benefit your loved ones. Knowledge of the existence and whereabouts of life insurance policies can be of critical importance. A policy locked in the deceased’s safe deposit box cannot accomplish the aims for which it was intended.

• List of Assets and Debts. Once again, adult children may know of the existence of lists of assets and debts without seeing the actual lists themselves, unless you so desire. An asset list—developed and updated regularly—should include information concerning all bank accounts, real estate holdings, pension holdings, annuities, business agreements, brokerage accounts, documentation concerning boats, cars, works of art or other valuables, and collectibles, and insurance policies. A debt list should include information pertaining to current mortgages, consumer indebtedness, personal loans, and business obligations. Both lists should provide complete information on where associated paperwork and files can be found.

Planning for death or disability can be difficult. However, leaving your grown children uninformed about your key financial, medical, and estate planning information can result in confusion and delay at a time when clarity and timeliness are of the essence. At first glance, these preparations may seem burdensome. However, once completed, both you and your children can rest assured that your affairs will be properly managed if needed.

Inflation, Your Retirement & Purchasing Power

October 10/17/2017
Marc Rittersporn/marc@integritt.com

You hear it all the time: you should make sure your retirement savings at least keep pace with inflation.
But what is inflation and how does it really affect your retirement savings? Let’s explore.

In simple terms, inflation is defined as an increase in the general level of prices for goods and services. Deflation, on the other hand, is defined as a decrease in the general level of prices for goods and services. If inflation is high, at say 10% – as it was in the 1970s – then a loaf of bread that costs $1 this year will cost $1.10 the next year.

Inflation in the United States has averaged around 3.29% from 1914 until 2016, but it reached an all-time high of 23.70% in June 1920 and a record low of -15.80% in June 1921. Most will remember the high inflation rates of the 70s and early 80s when inflation hovered around 6% and occasionally reached double-digits.

For comparison purposes, the inflation rate in Venezuela averaged 32.47% from 1973 until 2017, reaching an all-time high of 800% in December of 2016.
So how does inflation affect your retirement savings? The answer is simple: inflation decreases the purchasing power of your money in the future. Consider this: at 3% inflation, $100 today will be worth $67.30 in 20 years – a loss of 1/3 its value. Said another way, that same $100 will only buy
you $67.30 worth of goods and services in 20 years. And in 35 years? Well your $100 will be reduced to just $34.44.

How is inflation calculated?

Fortunately for us, we don’t have to calculate inflation – it’s done for us. Every month, the Bureau of Labor Statistics calculates indexes that measure inflation:

• Consumer Price Index – A measure of price changes in consumer goods and services such as gasoline, food, clothing
and automobiles. The CPI measures price change from the perspective of the purchaser.

• Producer Price Indexes – A family of indexes that measure the average change over time in selling prices by domestic producers of goods and services. PPIs measure price change from the perspective of the seller.

How the Federal Reserve Attempts to Control Inflation

Up until the early part of the 20th century, there was no central control or coordination of banking activity in the United States. In fact, the US was the only major industrial nation without a central bank until Congress established the Federal Reserve System in 1913 with the enactment of the Federal Reserve Act.

With the Federal Reserve Act, Congress set three very specific goals for the Fed: to promote maximum sustainable employment, stable prices, and moderate long-term interest rates.

In order to help the Fed stabilize prices, Congress gave the Fed a very powerful tool: the ability to set monetary policy. And one way the Fed sets monetary policy is by manipulating short-term interest rates in an effort to control inflation.

If the Fed believes that prevailing market conditions will increase inflation, it will attempt to slow the economy by raising short-term interest rates – reasoning that increases in the cost of borrowing money are likely to slow down both personal and business spending.

The flip side is true too: if the Fed believes that the economy has slowed too much, it will lower short-term interest rates in an effort to lower the cost of borrowing and stimulate personal and business spending.

As you might imagine, the Fed walks a very fine line. If it does not slow the economy soon enough by raising rates, it runs the risk of inflation getting out of control. And if the Fed does not help the economy soon enough by lowering rates, it runs the risk of the economy going into recession.

Currently, the Fed believes that “inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Fed’s mandate for price stability and maximum employment.”

What Investors Need to Remember

Therefore, it is imperative that your long-term retirement strategies account for inflation and that you prepare for a decrease in the purchasing power of your dollar over time. As your financial advisor, I would suggest you assume inflation will be around 3% – its historical average.

It’s true that inflation today hovers around 2% – the Federal Reserve’s target inflation rate – but I would prefer to use the last 100-years of data. If I’m wrong and we find that the inflation rate for the next 25 years turns out to be 2%, then the purchasing power of your retirement savings will be more, not less.

And I’d rather err on the side of caution

Boomers Going Out With a Bang

October 10/05/2017
Marc Rittersporn/marc@integritt.com

Maybe we should call them “Generation Generous.”
Over the next few decades, Baby Boomers will pass down an estimated $30 trillion in assets to their children and grandchildren.
It’s money they’ve worked hard to save and want their loved ones to have. Most Boomers, perhaps because they simply can’t imagine growing old, much less dying, have done little to prepare for this epic transfer of wealth. Meanwhile, their children — mostly Millennials are largely skeptical of professional financial services -and are confident they can use do-it-yourself digital tools.

They’re both wrong, of course.

Solid planning can help prevent mistakes that could cause potential arguments or lawsuits.

1. Get your children involved with you and your financial professional early on.
At least make an introduction to give them a basic understanding of what’s important to you. If you’re comfortable getting into details, consider sharing the types of assets you’ll leave and how you would like them to be divided. You may be surprised at the things that can cause arguments down the road.

2. Talk to your financial professional about tax-efficient strategies.
I believe and have read many articles that say a majority of the heirs who inherit an IRA take it as a lump sum, pay all the taxes and blow it within nine months. If this isn’t what you want for your kids — and their kids — talk about multi-generational IRAs.

3. Choose a capable decision-maker.
After all debts have been settled, it is up to the executor or successor trustee to distribute the assets to heirs according to the provisions of your will. He or she may have to deal with disappointed family members or others who feel they didn’t get their due and will drag out the process. We think it should be someone who is well-liked, respected, persistent and business-minded, as this is a large responsibility and shouldn’t be taken lightly.

4. Make sure your health care — and end of life — wishes have been made clear to all family members.
Tell them specifically what you want to happen, and try to have that conversation with them all at the same time. This is where we can see fights. For example, one child wants to hold on and keep Mom on a respirator and/or feeding tube. And no one is sure what Mom really wanted. Make sure your wishes are well-documented.

5. Talk about asset protection.
The last thing you want is for some or all of the money you leave to your children and/or grandchildren to go to a potential ex-son-in-law or ex-daughter-in-law. There may be ways to prevent that through proper estate planning.

It all starts with communication with your loved ones and your team of financial professionals
Just lay it out there to help reduce any problems so everyone knows what Mom and Dad want.

Build your Financial Foundation with Regular Reviews

September 9/26/2017
Marc Rittersporn/marc@integritt.com

Successful money management requires ongoing discipline. Each year, you should pull all your records together and take a close look at your entire financial picture. Here are six steps that can help you put your financial affairs in order:

1. Analyze your cash flow. In your budget, does your income equal or exceed the amount you put into savings and fixed or variable expenses? If it exceeds the amount, by how much? The amount of income that exceeds what you saved or spent is called positive cash flow. If your expenses exceed your income, you have negative cash flow. If your cash flow is negative, it may be time to reorganize and minimize any unnecessary expenses in your budget.

2. Provide money for special goals. For every financial goal you establish, you need to address the projected cost, the amount of time until your goal is to be realized (time horizon), and your funding method (e.g., a scheduled savings plan, liquidating some assets, or taking a loan).

You should plan your goals on three tiers. On the first tier, you have an emergency fund of at least three months of income. On the second tier, you may have a special goal and may, for example, establish a savings plan for your children’s weddings or educational expenses. Finally, on the third tier are more flexible goals such as purchasing an automobile, renovating your house, and planning a vacation.

3. Enrich your retirement. Are you going to have enough money when you retire?
Pensions and Social Security may not provide enough income to maintain your current lifestyle during your retirement years. Therefore, review your retirement needs and plan a disciplined savings program for your retirement.

4. Minimize income taxes. Many taxpayers reduce their taxes by taking advantage of tax deductions. Most are familiar with common deductions (e.g., mortgage interest, contributions to retirement plans, and donations to charities). In addition to tax deductions, however, there may be other ways of reducing your income tax bite. For example, under appropriate circumstances, losses or expenses from previous years may be carried over to the next tax year.

5. Beat inflation. Let’s say the inflation rate is currently 2%. In order to maintain your buying power—just to break even—you need a 2% annual wage increase. A decline in your buying power will certainly lower your standard of living and affect your lifestyle. In the end, you’ll have less money if inflation starts to beat you. Consequently, you need to put your money to work to beat inflation.

6. Manage unexpected risks. You are probably well aware that life sometimes throws us unexpected “curve balls”—that is, unforeseen risks. Suddenly and unexpectedly, your potential risk may become a financial loss (e.g., you become disabled without income or an untimely death causes financial hardship for your family). As a result, many have made insurance the cornerstone of their overall finances because it offers protection that can help cover unforeseen potential liabilities and risks.

These six steps will help you focus on the important issues that affect your finances. If you faithfully keep track of your progress in these important areas, you may be able to both afford your future and finance your dreams.

Considerations for Charitable Giving

Posted September 9/19/2017
Marc Rittersporn/marc@integritt.com

In light of Hurricane Harvey and Hurricane Irma, I thought the following would aid my friends and neighbors here in Martin County, Florida, and beyond in creating a simple plan to put your desire to help to action. There are many lives in need of assistance after a hurricane, such as the homeless, foster children, abandoned animals, and families with low incomes. It can be overwhelming trying to decide where you can help or even which cause to help. Just remember, you are a part of the solution, not the solution. Having a plan can help you with the overwhelming mountain of need and the desire to give. I am so humbled that there are so many of you out there contemplating how to help; please read on to learn how to do so in a way that makes the most sense for you.

Sometimes, our desire to give leads us to make commitments that are difficult to fulfill. Any endeavor worth undertaking, especially one that may affect others, deserves our careful consideration before we begin. When contemplating charitable giving, think about the following points:

• Choose Your Causes. Worthy causes abound and regularly solicit our time and money. Choose a few organizations that focus on areas that are meaningful to you, and then research what kind of help is needed.

• Budget Your Gifts. When planning your annual budget, include charitable gifts. Distributing your donations throughout the year may lessen the impact on your finances and increase your total giving.

• Plan Your Volunteer Activities. Volunteering can be a rewarding experience, especially when you’re able to see the fruits of your labor. Carefully determine the time you have available to ensure your best efforts for the cause. Avoid taking on too much.

• Review Your Plans. Just as you review your annual financial budget, review your annual time and value budget. Revise your volunteer commitments to include only those where the rewards have been the greatest for both you and your cause. Think quality rather than quantity.

Through our gifts of time and money, we may create better communities and a better world. The time spent formulating your charitable giving strategy can help you maximize the effect you have on the causes and organizations that are closet to your heart.

10 Tips for Your $ Future

Posted August 8/29/2017
Marc Rittersporn/marc@integritt.com

However much you make or save now doesn’t promise you a bright financial future. Life is unpredictable.
Follow these 10 tips to prevent you and your family from money troubles.

Follow these 10 tips to prevent you and your family from money troubles.

1. See a lawyer and make a will. If you have a will, make sure it is current and valid in your home state. You and your spouse should review each other’s will – ensuring that both of your wishes can be carried out. If you are divorced and remarried, update your beneficiary designations. Provide for guardianship of minor children, and establish education and maintenance trusts.

2. Pay off your credit cards. Almost 40% of Americans carry credit card debt. This is not good for your financial future. Create a systematic plan to pay down your balances. Don’t fall into the “0% balance transfer game” – moving debt from a higher-interest credit card to a lower-interest one. It hurts your credit score, making it harder to get loans and insurance at a good rate. You can avoid an unpleasant increase in your insurance rates by managing your credit wisely.

3. Buy term life insurance equal to six to eight times your annual income. Also consider purchasing disability insurance think of it as “paycheck insurance.” This is primarily true for younger folks who have financial obligations to cover with future income. Stay-at-home spouses need life insurance, too.
Most people don’t need a permanent policy, such as whole life or universal life, but each family’s needs are different. You should review your situation carefully with an insurance professional (preferably two or more) before making decisions.

4. Build a 3-to-6-month emergency fund. This keeps you from having to charge up your credit cards when life’s emergencies strike. In the interim, before you build up your fund, you can establish a home equity line of credit, which allows you to borrow money against your house – this can take the place of part of your emergency fund.

5. Don’t count on Social Security too much. Since projections show that Social Security is only able to pay 77% of promised benefits after 2033, you should adjust what you expect to receive, especially if you are younger than 50. Make up for this by funding your individual retirement account every year. If you don’t fund these accounts annually, you lose the opportunity to increase your tax-deferred savings. Fund an after-tax Roth IRA over a traditional IRA if you qualify.

6. If offered, contribute to your 401(k), 403(b) or other employer-sponsored saving plan. Just the same as with your IRA, these are opportunities you should take advantage of to defer funds. In addition, if you don’t participate, you lose the chance to receive any matching funds from your employer.

7. Use your company’s flexible spending plan to leverage tax advantages. A flexible spending account allows you to pay for health-care and dependent care expenses with tax-free dollars. You lose the tax advantages for that year if you don’t use your flex plan annually.

8. Buy a home if you can afford it and maintain it properly. With every mortgage payment, the equity in your property grows. You’ll have much more to show for your money spent than a box full of rental receipts. The benefits are more than financial – studies show that home ownership adds to peace of mind and improves quality of life.

9. Use broad market stock index funds to reduce risk and minimize costs. Indexes are a simple way to diversify. Most importantly, they’re cheap. If you have limited options, for example in your 401(k) plan, make sure that you diversify across a broad spectrum of investments by getting a low-cost index.

10. Don’t be over-weight in any one security, especially your employer’s stock. As a rule of thumb, keep exposure to any single stock to less than 5% of your overall portfolio. If you over-expose to a single stock and that company goes bankrupt, you lose a significant portion of your portfolio. It can happen easily. History is littered with good companies that went bad.

25 Financial Tidbits

Posted August 17th, 2017
Marc Rittersporn/ marc@integritt.com

1. People often have twice the credit they actually need. Avoid temptation by never charging more than 50% of your total credit limit.

2. Join your company’s retirement plan and try to contribute as much as you can, especially when the contribution is made from before-tax earnings.

3. Can you imagine your heirs receiving only half of your hard-earned assets? That’s what could happen if you don’t take estate planning seriously enough.

4. Life insurance provides the kind of life you would have given your family if you had lived to do it.

5. One of the greatest gifts you can give is to help pay the education costs for your grandchildren. Any gifts, regardless of how large, made to anyone for the purpose of funding education, do not incur gift taxes as long as the payment is made directly to the educational institution.

6. What is an immediate annuity? It’s a contract that pays an income that you and/or another person may never outlive.

7. Protect your health and your wealth with a health care proxy and durable power of attorney. These legal documents help ensure your wishes will be carried out if you become mentally or physically incapacitated due to accident or illness.

8. Think of financial security as lifelong accumulation—even if you only do it in small amounts.

9. Donate items you don’t need, or use, to charity. Be sure to keep your receipts. You may be entitled to an income tax deduction.

10. Buying low and selling high is a lot easier said than done!

11. Add up your current and future liabilities, such as your mortgage, education expenses, and how much you’ll need for retirement. Then, ask yourself this question: “Is my family’s future worth protecting?”

12. A shorter mortgage isn’t always better. Take a long-term mortgage, and then make additional payments when you can. If things become financially “tight,” you can stop making additional payments.

13. Protect your tangible assets. Have the right amount of homeowners and automobile insurance coverage for liability and disasters.

14. Withdrawing retirement plan assets before age 59½ may lead to a 10% penalty, while not withdrawing enough after age 70½ may lead to a 50% penalty. The moral of the story? Know when to make withdrawals.

15. When you’re buying a new or used car, don’t forget to factor in any state sales taxes. If state sales taxes are 5% and the sticker price on the car of your dreams is $20,000, that car will really cost you $21,000.

16. Reward your children for hard work—they’ll soon understand that hard work is often accompanied by rewards.

17. Organize your financial house. Set up a filing system and organize your investments and insurance policies.

18. Make sure you own disability insurance. It will help replace your income if you are unable to work due to an illness or injury.

19. Did you know that if you work while you receive Social Security benefits, your benefits might be taxed?

20. Like regular checkups with your physician, regular reviews with a financial professional are important to your financial “health.”

21. Keep your total monthly debt from exceeding 35% of your gross income.

22. If your company doesn’t have a retirement plan, be sure to contribute the maximum to an Individual Retirement Account (IRA).

23. Pay yourself first. As you set your budget each month, set aside money for savings and expenses first. What’s left over can be used for other purposes.

24. If you die without a will, you will leave the distribution of your assets up to someone else.

25. If you expect an income tax refund, refrain from giving yourself a pat on the back. Sure, your entire refund amount is your money. But, it’s also money that has been at work for Uncle Sam, not you. An accountant can help you establish an income tax plan that keeps your money working for you.

Half of a Whole: When You Lose a Spouse

Posted July 25th, 2017
Marc Rittersporn/ marc@integritt.com

Whether it’s sudden and unexpected or after an already lengthy ordeal, there’s nothing that can prepare you for losing your spouse. Grief and mourning affect each of us uniquely, but all widows and widowers share a painful dilemma: On the one hand, the world seems to demand rapid response to a barrage of critical questions – financial and otherwise. On the other hand, it’s usually a terrible time to be making big decisions, especially if they really can wait.

Here are some helpful handholds to hang onto if you have been recently widowed (or you know someone who has), plus preemptive steps to take if you’re reading this in happier times.


Don’t decide anything you don’t have to – especially about your finances.
This may seem like odd advice from a financial advisor. Our usual role is to help people make sound money decisions and get on with their lives. The thing is, when you’re experiencing grief, it’s not just an emotion. It’s a biological process affecting your ability to make rational decisions regarding your financial interests. Even small choices can feel overwhelming, let alone the big ones. That’s why our advice at this time is to put off anything that can wait.

By the way, most financial decisions are NOT as urgent as they might seem.
This brings us to our next point. Remember, service providers, friends and family (who may also be grieving) may mean well. But their sense of urgency – and your own – may be off-kilter. Basically, unless all heck is about to break loose if you fail to act, give yourself a break and assume most financial decisions can wait.

Create the space to focus on matters that actually are urgent.
Putting long-term plans on hold also helps create space to take care of the essentials, such as making funeral arrangements, managing immediate expenses, and simply taking care of yourself and your dependents. Do make sure you’ve got enough cash flow available to make daily purchases and pay your bills, so these don’t become a source of added stress. Gather imminently critical paperwork such as any pre-planned funeral arrangements, and multiple copies of the death certificate. It’s also best to ensure your and your children’s healthcare coverage remains in place. Let everything else slide for a little while, and/or …

Lean on others, even if you don’t usually.
You don’t have to go it alone. For practical and emotional support, turn to friends, family, clergy and similar relationships. For financial and legal paperwork, contact professionals such as your financial advisor, CPA and insurance agent. Focus on relationships that help relieve your burden and avoid those that burn up your limited energy. Be cautious about forming brand new relationships at this time; unfortunately, seemingly sympathetic con artists prey on those whose defenses are down.


Assess where you’re at.
Once you feel ready to take on some of the mid- and long-range logistics, slow and steady remain the ways to go. It can be helpful and cleansing to start by gathering up your scattered resources. Wills and trusts, insurance policies, financial statements, personal identification, mortgages, retirement benefits, safety deposit box contents, business paperwork, military service records, club memberships … Whether on paper or online, take stock of what you’ve got.

Reach out.
Continue reaching out to others to address your evolving needs. Turn to your financial advisor for assistance in organizing your investment accounts, shifting ownerships as needed, closing or consolidating unnecessary ones, and sorting through your spouse’s retirement and work benefits. Contact your spouse’s employers to learn more. Work with a lawyer for settling the estate. Meet with an insurance specialist to revisit your healthcare coverage. Speak with your accountant about the necessary tax filings. Contact creditors about resolving any outstanding debts. Firm up your ongoing banking and bill-payment routines.

Shift your focus outward.
When it comes to lifetime transitions, each of us is on our own schedule. But eventually, the time will come when you’re ready to circle back to those larger decisions you put on hold. Again, don’t go it alone. Your financial advisor can help you take a fresh look at your finances – your earning, saving, investing and spending plans. You also may start to look at your larger wealth interests, such as your will, trusts, overall insurance coverage and more. Whether you determine everything is fine or adjustments are warranted, wait until you’re at a place in which you can make these sorts of decisions deliberately instead of in haste.


If you’re reading this piece during happier times, we can’t emphasize enough how important it is to pre-plan for when one or both of you pass away. Pre-planning can simplify or even eliminate some of the most agonizing decisions surviving family members must face during one of the worst times in their lives. As such, your wills, trusts, powers of attorney, living wills (advance directives) and pre-planned funeral arrangements may be among the most loving gifts you can give one another as a couple, especially if you have dependent children. If these key estate planning materials are not yet in place, there’s no better day than today to give each other the gift of advance planning.

How else can we help? When you’re ready to talk, please know we will be here to listen.