2020 is almost here and you have a million things that you plan to do in the New Year. From starting a new business to getting out of debt to buying a car to sending a child to college, you and your family have plans.
Then, there are plans that may happen whether you plan them or not: employment change, aging, inheritance, and other events out of your control. So, let’s talk about how these life events give you reasons to hire a financial advisor in 2020:
- Inheritance: The unfortunate death of a family member may bring an inheritance. That money and/or property may be substantial. You may have questions on whether it should be invested, taxes owed, (if any), or how it should be distributed or sold. An inheritance can be both a blessing and a burden. Your financial and tax advisor can advise you on using the inheritance to pay down debts, invest in IRAs or other investment vehicles, and other ways to work toward achieving personal and business investment goals.
- Family planning: On the reverse, you may be planning to have children or there may be a pregnancy now. How do you financially plan for that? A child may cost around $234,000*** to raise during their eighteen years at home. Then there is college! Your financial advisor can give you guidance on how to save money for that child, even before they are born, and how that money can be used for a college education years later. Your tax advisor can discuss any tax benefits from these decisions.
- Retirement: Many people hope to retire and enjoy their later years. Some people reach retirement age (65-70) and cannot stop working for financial reasons. However, even if you are in middle-age, it’s not too late to plan now. Your financial advisor can help you make smart retirement investments and plan your social security and estate.
- Remarriage or divorce: Getting remarried or divorced brings on new life challenges. Do you and your new spouse have investments to cover your goals? Do you need to plan a new financial and investment strategy? How do you plan to pay your taxes in the coming years? How do you file your taxes in the coming years? Do you have a plan for Medicare and social security? If you divorce, how do you plan to pay child support or use child support? There are several crucial areas that a financial and tax advisor can direct you to make wise decisions.
- Selling or buying a home: You may be planning to purchase a bigger home or a smaller home based on your family needs (full nest or empty nest). How much do you need for a down payment? How much can you afford to pay as a mortgage payment? If you are selling, how much should you use to buy a new home from that sale? Will the gain from the sale of your home be taxable? A tax advisor can help you make the best decision for you.
A New Year is a “clean slate” in some ways. The new year gives you the opportunity to make major financial decisions you didn’t make or were unable to make in 2019. Consult your financial advisor and let them guide you toward smart investing for now and the future.
A.K. Burton, PC, has experienced tax advisors on staff who can help you plan for the tax consequences of these important financial decisions. Don’t wait. If you have a big life change, it’s time to reach out and call (301) 365-1974 for a consultation. We serve the Bethesda, Rockville and Montgomery County. MD area. ***See the report here.