It is quite normal for investors to occasionally check the balance of their investment accounts.  After all, that balance is often the result of a lifetime spent working hard, saving well and delayed gratification; and can serve as a good barometer for financial health.  But net worth is not the only measure of success and good financial stewardship. How one protects their net worth can be just as important. 

Below are five important topics we’ve found are often neglected by clients, or at least overshadowed by focusing too much on capital markets.  However, each of these areas should be discussed and reviewed regularly to ensure your goals are secure. 

Longevity Risk

Longevity risk is a term used to describe the risk that one may outlive their money.  In fact, it is high on the list of fears that most clients have.  Most financial experts agree that a safe withdrawal amount is 4.0% of your starting retirement balance, but this is just a rough estimate.  A thorough analysis with your financial advisor can provide a more suitable withdrawal rate for you based on your unique circumstances. Stress testing these strategies can help provide peace of mind as well!

Taxes

Paying taxes is not the most pleasant experience, but it can be rewarding to know you avoided paying more than the IRS requires.  Various tax saving strategies are available depending on your age, whether you are still in your earning years or in retirement, your state of residence and your charitable interests.  Many of these are overlooked until it is too late to take advantage of them.  Of course, any tax strategies should be discussed with your tax advisor as well.

Insurance

Many clients have life insurance policies for a multitude of good reasons.  However, as time passes those reasons can change so that the original purpose of the policy may no longer be valid.  Or perhaps the amount needed is no longer appropriate.  Beneficiaries may change as well.  These are just some of the reasons to have a thorough insurance review at least every few years.

Long-Term Care

Long-term care expenses will affect approximately 70% of the population at some point, with 30% incurring nursing home expenses.  Unfortunately, the expenses associated with in-home assistance, assisted living, and nursing home stays are a big risk to many retirement plans.  Should you have insurance coverage?  If so, how much?  What type of plan?  Can you self-insure? 

Wealth Transfer

Finally, wealth transfer planning discussions are often delayed for various reasons.  While it can be a difficult and emotional issue to address at times, there can be advantages to having those tough conversations sooner rather than later.  For example, some strategies work better if given more time to benefit.  It is never too early to start.  Many clients find peace of mind by putting their wishes in writing (a formal estate plan) and discussing their plans with their children and other heirs. 

In summary, there are many financial issues that you have quite a bit of control over, unlike the stock market.  At American Trust, our Fiduciary Investment Advisors welcome the opportunity to work with you and find optimal solutions to these issues, and many others.  We look forward to having a conversation with you soon!