Who do you love ❤️? Top 3 financial tips to help you show your love😘.

As we approach Valentine’s Day ❤️, I’d like to focus on our loved ones, and discuss a few important financial topics that impact them. We’re happy to share our top 3 financial tips to help you show your love 🎁:

 1.     If you love your family 👩‍👩‍👧‍👧, please take care of your own health 💪🏽.

I’ve processed many life insurance and long-term care insurance applications this year. On a positive side, I believe these past few years have prompted more people to reevaluate what financial planners call the ‘risk-management’ sleeve of their personal financial life, which is so great! However, for better or for worse, the application process often reveals shortcomings in our past or current health 🩺 picture. Some people weigh too much, drive 🏎 too fast, smoke 🚬 or chew tobacco or nicotine products, or have significant mental health issues (depression 😢, anxiety🙀, and sleeping 🛌 issues are the most common). All of these potential findings may lead to insurance companies declining coverage to applicants or giving them less-desirable health ratings, which may significantly ⬆️ increase their premiums.

So please, please, please take care of your own health: visit your primary care 👩🏽‍⚕️ physician at least annually, and take care of all the other check-ups that arise, especially as you get older (mental health, mammograms, colonoscopy, prostate exams, skin checks, dental health, etc.). And encourage your loved ones to do the same! I find that while this year, EVERYONE is ‘too’ busy, your families’ well-being counts on you, so no more excuses – make those check-up and follow-up health appointments!

And lastly, despite all the difficulties that sometimes arise in insurance applications, if you’re personal situation has you in a role of major breadwinner OR major caregiver, you may want to consider life insurance as well as review the type of insurance and appropriate levels of coverage periodically.

There are a few ways to think about HOW MUCH 🤷‍♀️ coverage you may need or want. The first way to determine you current and future liabilities. For example, say I have a $500k mortgage. I also have 2 kids who I’d like to send to the college of their choice. Given the crazy costs of a college education, I must budget at least $250k for each child, if I’d like to fully fund their education. Thus, $500k + $250k + $250k = $1mm of death benefit needed to fund these goals should I have an early demise.

I’m a stay-at-home mom 🤰🏿, do I need life insurance coverage?

In many cases, that answer is a resounding YES! In fact, there is a calculation called the 🐣 Mother’s Day Index, which assigns a ‘salary’ to all the work that mothers do annually. This includes activities such as making dinner, helping with homework, and arranging for summer activities. For 2021, it jumped to an all-time high of $116,022. Insure.com uses the most recent wage information from the Bureau of Labor Statistics (BLS) as they derive mother’s ‘salary’. In fact, it is a really interesting read, found here.

Thus, I typically round needs to approximately $100k/year. For young parents, I do like 30 year term life insurance coverage, as it is taking longer for our children to finish college and additional education, and to finally launch and get off our payroll.

There are, in fact, many types, of which I’m more than happy to discuss, but term life insurance may be the least 💳 expensive if you’re still in working/accumulation years. When our thoughts turn to decumulation and estate disposal, we also talk about other types of insurance products that continue beyond a specific ‘term.’  

2.   If you love your family😘, please increase your retirement savings to the new 2022 maximum employee deferral allowed - $20,500.

If you are covered by a retirement plan at work, the MAXIMUM deferral, meaning, the most you can add to your account from your OWN paycheck, ☝🏽increased from $19,500 in 2021 to $20,500 in 2022. The catch-up provision, or additional funds you can add starting in the YEAR you turn 50, of $6,500 – for a grand total of $27k. Even if you turn 50 on December 31, 2022 – you can STILL contribute that maximum $27k for the entire year. You can read more about this latest update in my article on CNBC. 

If you are unable to contribute the maximum $20,500 (or $27,000 if you’re at least 50), I encourage clients to auto-escalate 🆙 their contributions. Many plans allow for employees to choose this option, at enrollment, or anytime thereafter. It usually allows you to choose the timing of an automatic annual increase the percent you contribute to your plan. For example, if it is common that you receive a 3% raise each year, plan to auto escalate some, if not all of that raise, so that you “pay yourself first” 👏 by saving more for retirement instead of having those funds hit your checking account and get spent🤑. 

3.   I would like to make some financial gifts 💰🎁 this year to my loved ones. What should I consider?

If you are fortunate🍀 enough to have the means to make monetary gifts, you should know that the annual gift tax exemption increased from $15,000 in 2021 to $16,000 for 2022. See the IRS update here. That is great 👏 news for grandparents 👵🏽👴🏽 who may want opportunities to decrease their taxable estate – suggest $16,000 gifts to your own children who may need those funds for schooling 🎓or other reasons. 

4.   Bonus tip: Check out our great resources from the 📰 Press we have been excited to participate in. 

I really enjoy working with reporters and believe that when I can help them with their articles, together we are able to reach a much wider audience and share financial tips and 🦉wisdom – hopefully helping more people have a positive impact in their financial lives.  I encourage you to peruse the Press page of my site, found here. I speak frequently with reporters, and always update my site with the articles where I’m quoted.  

I’m also VERY🥳 excited to announce that in addition to my digital press, this spring I’m expected to be quoted in the Print edition of THIS OLD HOUSE 🏡(my MA friends will be very familiar with that publication as most of our housing stock is OLD! 🙀). I’m also expected to appear in the print edition of the AARP BULLETIN.

Green Bee press includes: 

1.      “Now’s the time to Boost 401(k) contributions for 2022.”

2.    “Pre-tax vs. Roth 401(k): There’s more to consider than you think”

3.    “How Advisors are Shielding their clients from Fraud.” 

4.   “10 Financial Moves to Make in Your 60s.” 

5.   “Working Moms Are Neglecting 401(k) Rollovers. Why Advisors Should Help.”

6.   “Britney Spears’ Fight for Financial Independence.” 

7.    The Best Car Insurance for Drivers with Bad Credit.”

8.   And many more articles found here.

So here’s to wishing you and your loved ones a wonderful Valentine’s 💝 Day, and a happy 😍, healthy 🏃‍♀️, prosperous 🏆 2022!

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.