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Dear ,
Welcome to February 2013 issue of The Wealth Chronicle! |
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Creating a Financially Organized Life
There are two cornerstones to embarking on any financial planning effort. The first is to get a handle on your income and expenses and the second is to get organized. This article is going to discuss how to create a system to organize your bills, statements, policies, and other financial paperwork.
Financial organization saves time and money because it aids in paying bills on time, being able to find needed documents during tax season, providing proof of payment, disputing credit cards or billing errors, and avoiding the stress of dealing with piles of unorganized bills and paperwork. It also helps your working relationship with your financial advisor as you'll have more clarity around the overall financial situation, leading to more informed decisions about investments and financial plans.
The actual organization system you put in place is not as important as actually putting a system in place. For most people taking the first step in organization is the hardest. Take the plunge. In most cases a combination of electronic and paper filing systems will do the trick.
Electronic Storage
Any documents (bills, statements, policies, etc.) that are delivered online can be stored and backed up on a computer. You may want to use an external hard drive for backup or you can also use an online service. I use sugarsync.com. Another popular tool is carbonite.com.
Paper Filing System
A good old filing system can do the trick of storing documents. One tool I like to use with my clients is a three ring binder with separated folders for each area of their financial lives. The organizer contains the following tabs: Emergency Contacts, Insurance, Financial Plan, Investments, Review Meetings, Advisory Process, Budget and Cash Flow Management, Net Worth Statements, Education Plan, Bank Documents, Retirement Plan, Estate Plan, Charitable Giving Plan, Tax Information, Titles and Deeds, Warranties and Contracts. The folders are tilted towards financial planning, but you can come up with whatever categories work for you.
Online Tools
If you are a little tech savvy there are online tools that can help with organization bringing all of your accounts into one centralized location. Instead of having to log on to a different website for each of your accounts you can aggregate them to one view. Two of these services that I like are Mint.com and HelloWallet.com Whether you organize online or via a paper filing system there are certain documents you want to keep that generally falls into the following categories: investments, taxes, credit cards and loans, college savings, retirement savings, insurance, and estate planning.
What Documents to Keep
Investment planning
You may not have all of these different kinds of accounts, but having the policies, statements, and other important paperwork of the ones you do can help: Checking , Savings, and Money Market accounts, CD's, Brokerage accounts, Mutual Funds, Annuities, Life Insurance cash value, IRAs, Retirement plans, Employee stock purchase plans, Stock options, Stocks, Bonds, Real Estate, Precious metals and other collectibles, Business interests and other investments.
Income tax planning
Tax planning can be used to identify strategies designed to reduce future income taxes. These may include tax-loss harvesting, investing in tax-advantaged vehicles, identifying tax deductions that may have been overlooked, or creating tax deductions such as setting up a qualified retirement plan. Note that income tax planning is different than income tax preparation which focuses on documents required by the IRS. The tax documents that should be safely stored are income tax returns for the last three years, paycheck stubs , statements showing the cost basis and current value of assets owned outside retirement accounts, statements showing major deductions such as mortgage interest and property taxes.
Credit and debt planning
Credit cards, mortgages, auto loans, student loans, business loans, personal loans are all documents that are good to store. It's a good idea to obtain a copy of your credit report which you can get for free once a year
College Planning
There are many types of college savings vehicles, so be sure to keep track of all the account with funds saved by parents, grandparents, aunts, uncles, and other relatives. To stay on top of balances and track savings keep Statements of accounts earmarked for college, completed FAFSA forms for students already enrolled in college.
Retirement Planning
Retirement planning is usually the largest financial goal for most investors. These documents are vital for staying on top of savings and investment goals: Account statement and summary plan descriptions for all employer-sponsored retirement plans, IRA statements, Social Security Personal Earnings and Benefits Estimate Statement (PEBES), Account statements for all assets, a budget showing expected living expenses in retirement, employee benefits information on health and retirement benefits, veteran's administration record.
Insurance Planning
Risk management is another vital aspect of your financial life. This includes life, auto, disability, health, and other coverage you may need. Retain these documents: Insurance policies and current policy statements for the following - Life insurance, disability insurance, health insurance, homeowners or renter's insurance, automobile insurance, general liability (umbrella policy), professional liability, long-term care.
Estate Planning
There are two key aspects to estate planning: wealth transfer and estate tax saving. Planning for and monitoring your estate requires maintain these records, including: a copy of your latest will and letter of instructions, index of all assets, trust documents.
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The OLD Foundation
Looking to have a good time and support a great cause? Come out to an event on March 9th in support of The OLD Foundation and its mission to eliminate pediatric cancer.
The OLD Foundation made its first major donation this month. $6,000 to the St. Joseph's Pediatric Oncology department.
You can read more about the OLD Foundation and purchase tickets to the March 9th event at The Old Foundation website: | |
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Everyone has seen the commercials with the duck, but few people know what the duck and Aflac do.
I recently added someone to my team who offers supplemental insurance benefits through Aflac. Would it be possible for us to come in and meet for 20 minutes with you to see if it would be beneficial to offer the benefits to your employees? The benefits are supplemental to your current medical benefits and do not compete with them. They are voluntary and paid for by the employee, not the employer. Here is a quick description of what would be offered.
What Aflac does is simple. When you or a family member has an accident or illness, medical insurance pays the hospitals and doctors...but there's a problem. Up to 50% of the costs associated with an accident or illness are non medical, which means it comes out of your employees pockets in the form of:
Medical Expenses: Such as co-pays, deductibles, coinsurance, out of network costs, reasonable & customary charges & alternative treatments which are becoming much more popular.
Loss Of Income: You could be out of work because of an accident or illness, maternity or taking care of a spouse or child if it was something significant.
Out Of Pocket Expenses: Rent, mortgage, utilities, food, daycare, student loans, tuition....the reality is that your paycheck will stop but your bills won't, they still keep coming..
So what we do is simple. We pay cash directly to your employees above and beyond any insurance.... we have nothing to do with medical insurance. Medical insurance pays hospitals and doctors. Aflac pays cash directly to you. The money is tax-free and can be spent any way they see fit. The programs are paid for, owned and controlled by the employees so there's no cost to you, the employer. Aflac plans are portable and guaranteed renewable, which means we can't take your coverage away or raise your premiums. Aflac hasn't raised their premiums on existing policyholders since 1955. The only way it stops is if you don't pay.
As the employer, you can offer our programs at absolutely no cost to you. Matter of fact, if we set up the benefits on a pre-tax basis (which Aflac will administer at no cost), it will save the company money. |
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THE WATERCOOLER
Save Olympic Wrestling - It was disheartening this month to hear about wrestling being removed from the Olympics starting in 2020. On a positive note the wrestling team I coach had a great season this year. We finished the year in second place with an 11-1 record and wins over rivals Verona, Caldwell, and West Essex
Cartoon - I saw this cartoon in the New York Times and thought it was pretty funny
Health Expense Quiz
Fidelity Investments released a study on how much a 65 year old couple retiring today will need to pay for future health care costs. This is out of pocket expenses not counting what is covered by Medicare. Do you want to take a guess on what Fidelity things you'll need to cover your expenses?
- $50,000
- $100,000
- $250,000
- $500,000
Answer: 3. $250,000 Luckily it's not $500,000 but most people do not have $250,000 allocated for future health care costs. The $250,000 estimate includes the cost of deductibles and copayments, premiums for optional coverage for doctor visits and prescription drugs, out of pocket expenses for prescription drugs, and other expenses that Medicare doesn't cover, such as hearing aids and eyeglasses.
The Marriage Penalty is when married couples are penalized by paying more tax on a joint tax return than they would if they file tax returns individually. Married couples filing jointly have different tax brackets than single persons; this can work to the advantage of couples with highly disparate income and single income households; however it can work to the disadvantage of couples with roughly the same income. A pretty cool calculator to see if you are paying more taxes by filing jointly is one from the Tax Policy Center. http://taxpolicycenter.org/taxfacts/marriagepenaltycalculator.cfm
The Cost of College is growing faster than inflation and now many students find it difficult to go to college without some type of loan financing. Heather Boushey, an economist for the Center for Economic Policy wrote that "In 1981, a student could work full time all summer at minimum wage and earn about two thirds of their college cost for the year. Today a student earning minimum wage would have to work full time for a year to afford one year of education, at a public university, and that assumes she saves every penny."
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Financial Data Card
Last week I mailed out a data card with key financial information for 2013. With tax laws changing this year you may find the card useful. If you would like an electronic copy of the card you can download it from here.
If you would like another hardcopy let me know and I'll get one to you.
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Free Retirement Planning Workshop
I am hosting a workshop at the Fort Lee Library on March 5th at 7:30PM. The workshop is a free, educational discussion on retirement planning and how to build a paycheck to last the rest of your life once you retire. A lot of the course material is based off of my book. If you or anyone you know is interested in attending you can find additional and registration info at http://retirementfitnesschallenge.com/speaker/
The Fort Lee Library website flyer for the event- http://patch.com/E-rSHD
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Please contact me if you have any questions about the articles above or about your personal or business finances.
Sincerely,
Marc Bautis
Wealth Manager
office: 201-842-7655
cell: 201-221-6895
fax: 201-754-9760
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Disclaimer:The information contained in this newsletter is for information purposes only and may not be suitable for your specific financial situation. You should consult a financial advisor before making any investment decisions relating to the information contained in this newsletter
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 | | MEET MARC | |
Marc Bautis is a Wealth Manager specializing in working with young families as well as retirees and those nearing retirement. He understands that everyone wants to not only protect their principal, but also be sure that their money lasts. He is committed and proud to deliver independent advice, always in the interest of his clients.
Marc is the creator of the Retirement Fitness Challenge™, a program designed to be sure his clients enjoy the retirement years as they have always envisioned them. Marc's program is designed to prevent outliving your money but also to minimize expenses during retirement and find the best time to start taking Social Security benefits. Marc is also the author of a recent book The Retirement Fitness Challenge: Shape Up Your Finances and Make Your Money Last a Lifetime, which is available on Amazon.com.
Marc is a graduate of Seton Hall University. He is a Bergen County native, from Lyndhurst, where much of his extended family still resides. He currently lives in Hasbrouck Heights with his wife Katie, new daughter Charlotte and Old English Bulldog, Winnie.
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