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Is Your Financial Plan in Need of an Update?

Is Your Financial Plan in Need of an Update?

An important part of a financial plan is keeping it up to date. Life can throw you a lot of curveballs, and your financial plan will need occasional tweaks to adjust for them — whether they’re the kind of changes you wanted or not.
The Times They Are A-Changin’

Major life events often require adjustments to budgets and expenses. There could also be significant tax implications to consider. Here are some changes that should alert you to the need for a financial reevaluation — especially when it comes to their potential impact on your retirement plan.

Marriage or divorce. Depending on the situation, marriage can add new debts and obligations. If you’re combining expenses and incomes while merging households, you might see your situation improve. On the other hand, divorce can be financially devastating. For women over 50, the termination of a marriage can lead to a 45% reduction in standard of living. Planning for this contingency is important as you approach retirement.

Birth or adoption of a child. Parents can expect to spend more than $233,000 when raising a child from birth to age 18. And that doesn’t include the cost of college. Adjust your financial plan after a birth or adoption to make sure you remain on target to achieve all your dreams — for you and your growing family.

Empty nest. You might be able to set aside more for retirement or shift focus to other goals once your last child leaves home. After you send off your first care package, start reviewing your financial plan to see where you might reallocate financial resources.

Buying a home or moving. A new living situation can come with higher — or lower — expenses as taxes, changes in insurance and maintenance costs as well as renovations can significantly impact your budget. Ideally, speak with a financial professional ahead of any move.

Illness or serious diagnosis. The average cost of healthcare in the United States is about $11,000 per person each year. And this number can skyrocket with a major illness or disability. If you have a chronic condition or significant healthcare crisis, it can be helpful to involve a financial professional early on to help you navigate.

Other Finance-altering Life Events:

     Job loss or change

     Pay raise


     Fire, theft or accident


     Death of a spouse

     Starting (or selling) a business

Don’t Go It Alone

All these events can alter your financial trajectory. Reviewing your financial plan periodically is prudent as you navigate life’s twists and turns. You may need to increase retirement account contributions or end up being able to retire sooner than planned. But no matter what’s next, contact your WellCents financial professional for expert advice to help keep your retirement plan on track.


Gen Z — Start Investing Now!

Gen Z — Start Investing Now!

If you’re a member of Gen Z — those born after 1997 — now is a great time to start investing for retirement. The power of compounding returns is one of the best ways to grow wealth over time. And the earlier you start, the less you have to set aside each month to reach your goals.

Consider that a one-time $10,000 investment you make at age 20 would increase in value to more than $70,000 by age 60, assuming a 5% interest rate. Meanwhile, it would only grow to approximately $43,000 if you make it at age 30. And the same investment at age 40? That would grow to a mere $26,000. As you can see, when it comes to investing, time really is money.

Here’s how to make the most of your investment dollars.

Find a Way to Invest

Even coming up with $200 can feel like a daunting task at this point in your life. Not only is your starting salary likely to be lower today than it will be in a few years, but you might also have student loan debt and other bills to contend with.

The good news is that you don’t have to invest a lot to begin building your wealth and preparing for retirement. Start with what you can afford, even if it’s only $50 per paycheck. Look for ways to free up a small amount of money in your budget each month so that you can contribute to your 401(k) and start putting that money to work.

Have a Plan

Create a plan for increasing your contribution down the road. If your employer offers a 401(k) match, try to invest enough to get the maximum. That match represents free money — and it’s the best deal you’ll find in the world of investing. Once that money is in your account, it begins growing, and it can boost your overall portfolio down the road.

Plan to increase your retirement account contribution each time you get a raise. Depending on your company, you could even plan an incremental increase in your contribution each year. For example, you could arrange to increase your contribution by 1% each year up to a certain percentage of your income.

The important thing is to get started and then up those contributions as often as you can. Get in the habit of investing, and you’ll be more likely to reach your long-term wealth goals even if you have to start small.

Give Yourself a Cushion

No matter your situation, there’s a good chance that, at some point, you’ll end up with an emergency where you must come up with a significant sum of money all at once. This can be stressful, and you might consider tapping into your retirement savings to help cover the cost.

However, it’s better to avoid using your retirement investments for emergencies since an early withdrawal can result in hefty penalties. Even if you get a 401(k) loan and avoid the penalties and taxes, anytime your money is out of the market, it’s not working on your behalf. You might replace what you withdrew, but you can’t replace the opportunity cost of time in the market. This is why establishing an emergency fund is so important.

Don’t Go It Alone

Investing for retirement can be daunting if you’re just starting out. Contact your WellCents financial professional to help you set realistic goals to grow your nest egg over time and give you a head start on the road to retirement.


COVID-Era Finances: It’s Time for a Checkup

COVID-Era Finances: It’s Time for a Checkup

2020 was an unprecedented year by any standard. Despite spending more time at home than ever before, many people feel like the last 12 months of the global pandemic went by in a blur. So much changed so fast, and no one is really certain to what extent these changes may persist into the future.


For many families — home and work life, schooling and socializing — all have been upended. Many people are eating out less and spending more on groceries, canceling vacations, skipping movies, but buying a lot more online.


Spare rooms have been turned into remote offices, backyards into staycation spaces and attics into home gyms. Even if you kept your job, your spouse could have lost his or hers. Your adult children may have needed additional financial support or moved back home. And many have faced tremendous impacts as a direct result of COVID-19, whether resulting from the loss of a loved one or unexpected medical bills. Perhaps you’re working from home — for some, that change could become permanent.


With so much in flux, this is a good time to schedule a financial check-up to review what’s changed and how those changes may affect your financial plan moving forward. Some potential areas to cover include:


Budget. As mentioned earlier, many household budgets have been severely impacted by the pandemic. For some, money has gotten tighter, while others may find themselves in an improved financial position. Either way, you’ll want to revisit how you’re allocating your funds.


Emergency Fund. COVID-19 has perhaps been the strongest illustration in recent memory of the need for an ongoing emergency fund. Many families have depleted the money they’d set aside. If this is the case for you, prioritize replenishing that account as best you can, even if it’s just a little bit each month.


Debt. You may have run up additional debt to cover shortfalls from lost family income or a pay reduction during the crisis. As a result, it’s important to reevaluate your debt payoff strategy, revisit interest rates on the debt you’re carrying, and try to minimize adding to your total debt if you can. Make a list of all of your debts along with their current balances and interest rates. Where possible, consolidate revolving credit debt onto your lowest-interest cards — and try to negotiate lower rates with creditors when you can’t.


Retirement Plan. Some employees have borrowed from their 401(k) as a stopgap measure. If you’re one of them, make a plan to repay these funds when possible, to avoid setting back your retirement timeline. Additionally, with so much volatility in the market, you may want to revisit your asset allocation and rebalance your portfolio, if necessary, to make sure it continues to align with your investment goals and risk tolerance.


Estate Plan. It’s the subject no one likes to talk about, but COVID-19 has made clear how important it is to address this issue. If you need to make or change any beneficiary designations, update your will, draft a power of attorney or establish advance directives, this would be a great time to tackle those types of tasks.


It can be very helpful to schedule a one-on-one (or Zoom) check-in with your financial professional, who can help you run the numbers and help you make any needed adjustments to your budget, saving and investment strategy or any other areas of your personal financial plan.

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