Friday, December 2, 2022

Just Follow the Recipe: Part II




Darcie Guerin

In the last column, we outlined the first six of twelve suggested financial resolutions; today we’ll address the remaining six. Committing to fearlessly evaluate and potentially change one’s behavior can be a bit intimidating. I’ve never felt that it was fair to ask others to do anything that I’m not willing to do, and because my financial life is already in good shape (it had better be!), the area I’ve chosen to focus on are organizational skills and I’ll be working with an efficiency coach this year. The idea of being accountable to another person concerning this area is a little daunting. I imagine this is how some people feel when they enter into a relationship with a financial advisor. Apparently, for transformation of any sort to occur, there needs to be change, and that hasn’t been happening on my own. Therefore, if knowing when to ask for help is half the battle, then I’m half-way there. Here are steps seven through twelve of the twelve New Year’s resolutions for 2013 for your financial efficiency improvement transformation.

7. Identify and evaluate retirement income sources. Most retirees have several potential income resources including Social Security, pension(s), retirement portfolios, rental properties, notes receivable, and inheritances. Determine how secure each source is. Can you really count on that inheritance, are there likely to be vacancies in your properties that would interrupt the cash flow, are the notes receivable backed by collateral? The point is to know which income sources are reliable and which are less certain, and how much of your total income each category represents. If too much of your retirement income is from sources you consider less than solid, it may be time to reposition your assets.

8. Review your Social Security statements. If you’re not yet retired, you need to go online and establish an account with Social Security Administration. The SSA won’t be sending individual statements of accrued benefits in the mail anymore.

Review your statement, and be sure all earnings over the years have been recorded. Use the SSA’s online calculator to compute your benefits at various retirement ages. Generally, it is best to wait as long as possible to begin collecting. Revise your spousal plan if applicable.

9. Review the tax efficiency of your charitable giving. There is a great deal of confusion in connection with the new “fiscal cliff” tax law changes and charitable giving. We didn’t know until after December 31, 2012 what the 2013 tax rates would be which compounded the problem for those who try to plan their gifting. Now that we know the tax rates for 2013, it’s likely that high income tax payers (those in the 39.6 percent bracket) will receive more benefit from making charitable contributions during 2013.

Deductions for charitable donations and many other itemized deductions may be limited in 2013, so it may be wise to review your situation. Think strategically about your contributions, donate low-basis stocks, rather than cash for example. Consider establishing a Donor Advised Fund, which enables you to take an upfront deduction for contributions made over the next several years and provides other benefits. Give, but do so with an eye toward reducing your tax liability and always work very closely with your tax professional.

10. Check to see if your retirement plan is on track. Understand what types of assets you own, what your cash flow situation is and is going to be, what your contingency plans are, what rate of return you’re assuming, how long you’re planning for, and all the other important details that go into achieving a successful retirement. The truth is that retirement has a lot of moving parts to continually monitor and manage. The important thing is to respond and determine, promptly and realistically, what changes might be needed.

11. Make those indicated changes. By now, you should have a good idea of where you stand overall, what your cash flow situation is, including whether you’re saving enough, what your retirement income picture looks like, and where the shortfalls or other challenges are. Do you need to adjust your contributions to your IRA or other retirement plans? Do you need to adjust your tax withholding? If you’re due for a raise, how about channeling the extra money into a retirement account? Are you taking full advantage of your employer’s retirement plan options, particularly any contribution match program? Regardless of whether you’re years away from retirement or close, the effects of compounding can be very significant, if you take advantage of them. Go after any problem areas, or opportunities, systematically and promptly.

12. Set up a regular review schedule. Your advisor is a like an efficiency coach who can help with specialized tools, impartiality, and the experience earned by dealing with many market cycles and different client situations. It’s essential to communicate with your advisor, telling him or her not only what’s happening in your life today but what’s likely to happen or might happen in the future. Are you going to move, change jobs, do you have children approaching college age, or may you face the possibility of significant medical expenses? Advisors cannot help you manage what they don’t know so err on the side of over-communicating. Establish a regular schedule for getting together and reviewing your portfolio, your financial and retirement plans, and what’s happening in your life.

Since we all know that many New Year’s resolutions typically don’t survive very long, you may increase the odds of success by sharing your goals and dreams, becoming accountable and asking for help. Resolve to follow through on these resolutions. Meanwhile, stay focused and invest accordingly.

This information is general in nature, it is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or solicitation to buy or sell any particular investment. Investing involves risk and the possible loss of principal invested.

Investing involves risk, and investors may incur a profit or a loss. There is no guarantee any particular investment strategy will be successful. Opinions expressed herein are those of the author and subject to change at any time. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame logo), which it awards to individuals who successfully complete initial and ongoing certification requirements. Diversification and strategic asset allocation do not ensure a profit or protect against a loss. This article provided by Darcie Guerin, CFP®, Associate Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at (239)389-1041, email Website:


Darcie Guerin, CFP®, is Associate Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239-389-1041, email

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