2016 may be remembered for many things, and we can only imagine what 2017 will bring. Take a moment to pause and reflect on your resolutions for this year and consider some good advice from an article in US News, “A Simple Resolution for the New Year.” The takeaway: don’t just come up with resolutions; come up with a plan and stick to it.
We all like the idea of making a New Year's resolution: it’s based on our desire to improve. Good intentions go a long way, but we’ve all fought through the jammed gym in January, only to hear crickets while exercising in March. Instead of biting off more than you can chew (so to speak), find one thing and make that your focus for 2017.
While a recent survey found that 40% of respondents put exercise and diet at the top of their resolution lists for 2017, right behind it was getting a better handle on money and saving more at 37%. Regardless of your age, here are simple and obtainable financial resolutions to think about for every generation.
Millennials: Try living on a cash basis for one month. This can be an eye-opening experience and make you more aware of debt and cash flow. In addition, you can see the true cost of living expenses, which can help you to be better about budgeting.
Begin to think about estate planning, too. Think about any debts you’d be leaving behind for loved ones, such as car loans or a mortgage. If you’ve begun building a family and have any children, you’ll want to make sure you’ve made provision for a guardian in case anything happens to you.
Generation X: Protect your family and yourself. Many Gen Xers are now parents while also focusing on careers. They’re reaching their maximum earning potential. A great resolution for Gen Xers is to purchase life insurance and/or disability insurance, in the event something happens to you or your spouse. You should also be sure to max out your 401(k) contributions to leverage the full employer match. Look into developing a financial plan and examine tax planning to maximize savings.
Now is also an ideal time for Gen Xers to begin thinking about estate planning. Many are at the point in their lives where they’ve accrued enough assets that passing away unexpectedly without proper planning could cause huge headaches for loved ones. Consider working with an experienced estate planning attorney to ensure your family is taken care of in the event of your death or incapacity.
Baby Boomers: Hopefully, you’ve already put an estate plan in place, but now is times to review it. Make sure your plan is up-to-date and, at the same time, review all beneficiary designations on life insurance policies, IRAs and other assets. Since the title (or name) on your assets is what determines what happens to it after your death, you’ll want to keep a careful eye on this.
There may be other, new estate planning concerns for Boomers. Some may be looking to qualify for Medicaid. In that case, there are strict assets tests you must pass. Planning with an experienced elder law attorney can ensure you qualify for the maximum benefits, minimizing the financial burden for your loved ones.
Whatever generation you belong to, you should be planning with an eye to the future. Americans are living longer, and retirement can last as long as two or even three decades. Throughout the year, you’ll want to make sure that your retirement finances are on track to keep pace with this longer lifespan and cost of living increases. Whether your retirement is near or far, increasing your retirement savings in 2017, even by a small amount, can have a big impact.
For more information on the importance of estate planning and aligning assets with your plan, explore our website and contact us to schedule your consultation today!
Reference: US News (December 20, 2016) “A Simple Resolution for the New Year”