The Trust Company provides a multi-dimensional approach to planning your future. After all, your goals and dreams are far from one-dimensional. Our advisors work with clients every day about the affect common life events may have on their financial plans. Common events like marriage, the births of children, and employment changes can warrant changes in a financial plan. Common examples of these are: tax filing as an individual vs. couples filing jointly, child tax credits, access to employer flexible spending accounts for medical and dependent care expenses and retirement plan matching contributions, retirement plan contribution limits and Roth IRA earning limits. “Once married, each partner having taxes withheld based on their respective earnings may not be enough to cover the total tax liability of both incomes, which may push them into a higher tax bracket. Making sure their tax withholdings are sufficient prevents them from incurring a penalty come tax time.” Through the financial planning process, we also review insurance coverage, plans for paying off debt, and having an adequately funded emergency plan. Whether a person is married or single, they should have an emergency fund that contains enough money to cover three to six months of living expenses. Having an emergency fund in place prevents them from putting groceries and other expenses on credit cards that would accrue interest for a number of months until they’re able to pay them off. Long-Term Financial Goals are Moving Targets It’s important to consider how a life event affects long-term financial goals. You may want to develop new goals or alter existing ones. A job change can affect your retirement saving goals if your income changes drastically or if you invest in a 401(k) and then neglect to move it over after you leave, consolidate it under the care of one advisor, or rebalance it regularly. If you are married and living in an apartment, for example, you may decide you want to buy a house; a financial advisor can help you figure out how to get into the kind of house you want, breaking down the overall goal into monthly saving targets. If you have a baby, you may need to alter the amount or type of life insurance you have or start putting away money for her future college education. “There’s no better time to start a 529 or UTMA account than when your children are small,” says Polly. One of the tougher life events to handle emotionally as well as financially is the long term or critical illness of a parent or loved one. You must be careful to think about the long-term implications of decisions made. If you have an emergency fund in place, you can take a leave of absence from work and rely on those three to six months of living expenses to care for a parent or loved one, as opposed to leaving your job altogether and putting yourself in a situation where you become a burden on your children later in life or have regrets about not being able to care for them. At The Trust Company, we seek to understand the many facets of your individual situation, and all the complexities that can affect your attainment of financial peace of mind. Together, we will make a plan that meets your unique needs and sets you on a path toward your financial goals. Financial planning is not a one-time plan - it is an ongoing process over the course of your engagement with The Trust Company. Many firms charge additionally for financial planning services, but we believe planning is critical to investing, therefore it is inclusive as a wealth management client. Contact us today for a FREE consultation to start the conversation and learn how we can help you!
