New Year Planning

New Year Planning

Jan 02, 2020

I usually start these blog posts with a cute little antidote about my family, a friend or even my dog.  This one is missing that component, so I hope that’s not why you stopped to read this.  If it is, feel free to reach out and I’ll fill you in on my dog’s latest antics – Woody Varvarezis does not disappoint.

As a new year (and a new decade!) begins, I’m reading a lot of articles about financial year-end checkups to do.  They’re fantastic ideas and you should totally look into them.  Getting your debt under control, saving more for retirement, tax planning, using your FSA money*, pre-planning large expenditures, and more are usually detailed in these articles.  But, for the past year, there’s one to-do that hasn’t escaped my mind.  And, this is one I strongly urge you to consider.

Last year, I met with an attorney to see how we could best plan for my parents’ future and steps we could take to help their financial stability.  The lawyer urged me to talk to them about updating their legal documents.  I dragged my feet on this.  My parents and I have the best, relaxed relationship, where we trade one-liners and funny stories back and forth.  Where can I throw in a “let’s talk about your declining health and pre-plan your funeral” line into a conversation full of dad jokes, home repairs, and encouragement to audition for the Wheel of Fortune?**

Taking the first step

It took forever for me to initiate this conversation, but I finally did.  And it was almost met with relief as my parents took it a lot easier than ever expected.  That same day, shortly after that conversation, my dad asked for assistance with some paperwork.  He wanted to apply for medical assistance for a recent injury of my mom’s and not being computer savvy, asked me to complete the online process.  We went through everything – assets, liabilities, retirement income, you name it – and submitted it for processing.

The next day, my dad died.  He wasn’t in the best of health, but we weren’t expecting this.  Our family, like all families, had a lot on our plate with next steps.  But we had one slight advantage.  See, that application had everything I needed to start contacting the appropriate parties – social security numbers, birth dates, pension providers, and account numbers.  And the scribbled copy that we used as our template to input online became my saving grace – a way to check off the companies I contacted, the ones that we needed to follow up with, the documentation that each one required, etc.  If it weren’t for that paperwork, I’d probably still be muddling through things.

Peace of mind

So, when those articles tell you to do certain tasks to get your year off on the right foot, I strongly encourage you to add one more item to that list:  keep your loved ones in the loop.  We have a document in the Participant Education Center (PEC) called Organizing Your Finances that will get you off to a good start, or you may have something of your own stored away in your files.  Print one of these off and get to work updating it.  Let your family know where your important documents are kept or who they can contact for assistance.  If you have a living will, be sure to review it and your wishes with your loved ones.  (If you don’t have a living will, please get one, it’s quick and inexpensive).  It’s not an easy or comfortable situation for anyone, but believe me, it’s a lot easier when everything is at the fingertips for your heirs.  If you don’t feel comfortable discussing finances and numbers with your family, don’t.  But, let them know where your accounts are, provide a phone number, your employer, and your employment dates so they’re not completely scrambling to find the information.  My dad left me with a ton of great memories, an endless supply of corny jokes, and a workshop full of tools and trains.  But, he also left me with peace of mind, and that is priceless.  I encourage you to do the same.

*Don’t be fooled by the marquis signs and ads telling you to use your Health Savings Account (HSA) money before you lose it, HSAs don’t work that way (only FSAs do).  You can use your HSA assets down the road – even in retirement when you may be more likely to need that cash.  A good thing to do with your HSA as part of a new-year review?  Look at how it’s invested and adjust accordingly based on your time horizon.  And put away all of your 2019 medical receipts in a file, shoebox, scanned document hard drive, etc. as you can use those in future years to access your HSA monies.

** FYI, in case you’re wondering, I absolutely tried out for the Wheel and unfortunately didn’t make the cut.  But that doesn’t mean I won’t try out again – stay tuned, because if I ever make it on there, you better believe that I’ll be spreading that news!

Melissa Varvarezis, CFP™ is a Communication/Education Specialist with BPAS Fiduciary Services.