Life Changes

At certain points in your life, you may need a little extra guidance. We have resources to get you started and the expertise to help you follow through with your goals.

Planning For Retirement

Take the time to plan for your retirement, no matter what your age is, it is never too early or too late. Will you have enough income in retirement?

Start Saving and Investing for Retirement

  • Work with a financial advisor to define your goals and get on track.
  • Estimate the total amount you’ll need to retire comfortably.
  • Calculate how much you need to save now to reach your retirement goal.
  • Begin saving and investing for your future today.
    • Maximize contributions to your 401(k) or other qualified plan.
    • Open an IRA and benefit from tax-deferred growth.
    • Review your plan at least annually to stay on track.

Before Retiring

  • List all monthly income and expenses to check your budget.
  • Create a retirement income plan to be sure you are financially ready.
  • Set aside a cushion for protection against bear markets.
    • Consider putting cash in a money market fund for short-term needs.
  • Bank CDs, deferred annuities, or short-term bond funds can be an outlet for cash needed in 2 to 4 years.
  • Work with an advisor to decide the best move for any 401(k) balances or pension plans.
    • Consolidation of accounts through rollovers.
    • Keep your accounts in your current plan.
    • Cash them out.
  • Check with the Social Security Administration about your benefits.
    • You can start receiving benefits as early as age 62, but generally it is beneficial to wait.
  • Consider where you will receive your health insurance upon retirement.
    • Go to www.medicare.gov to review your Medicare benefits and understand what is covered.

Retire Comfortably

  • Take the time to plan for your retirement, no matter what your age is, it is never too early or too late. Will you have enough income in retirement?

Consider these facts:

  • If you make it to 65, average male life expectancy is about 81 and female is about 84. That means those retiring at 65 should expect to need income for 16 to 19 years in retirement. *1
  • 58 percent of Americans have not calculated how much money they will need to save for retirement. *2
  • 47% of 56-62 year olds won’t be able to pay for basic expenses if they retire at age 65. *3
  • 35% of Americans rely on social security alone for retirement income. *4

*1. “Understanding Life Expectancy,” Kaye Thomas http://www.fairmark.com/retirement/socsec/life-expectancy.htm
2. “Retirement confidence survey not so confident,” AOL Finance, http://www.dailyfinance.com/2011/03/16/retirement-confidence-survey-not-so-confident/
3. Employee Benefit Research Institute, 2010
4. “Baby Boomers Start To Turn 65: 16 Statistics about the Coming Retirement Crisis That Will Drop Your Jaw,” The American Dream, December 30, 2010 http://www.infowars.com/baby-boomers-start-to-turn-65-16-statistics-about-the-coming-retirement-crisis-that-will-drop-your-jaw/

Download the Planning for Retirement Brochure.

Marriage

Communication is the first step to your financial plan. Discuss your goals for the future and decide how you manage your finances as a couple.

Communication is the First Step to Your Financial Plan

One of the most common reasons a marriage fails is money. So before your nuptials or shortly after, sit down with your spouse and discuss important financial planning and money issues. Starting sooner rather than later will solve the problem before it ever becomes one. If you need help in getting started, working out a plan, or are finding holes along the way, ask for help from your trusted financial advisor.

Where to Start?

  • Consider how integrated you want your finances to be.
    • Check state rules on community property.
  • Develop a financial plan that fits for both of you.
    • Identify your goals for the future such as buying a home, starting a family, and retiring in comfort.
    • Get help with your personal Introductory Financial Planning consultation.
  • Start investing now to achieve your financial goals.

How Should We Manage Our Shared Finances?

  • Make your name change official.
    • Order certified copies of your marriage certificate.
    • Notify your employer, the Social Security Administration, and the DMV.
    • Order replacements for credit cards and bank accounts.
  • Request copies of your credit reports to check accuracy.
  • Work together to eliminate unneeded debt.
  • Consider your income filing choices.
    • Work with a tax advisor to assess whether to file jointly or individually.
    • Update your W-4 forms which can be found at www.irs.gov.
  • Determine current insurance needs and what they will be if/when you have children.
    • Check your life, health, and disability coverage and eliminate any duplication.
  • Review and update files for all personal accounts and property.
    • Update beneficiaries for your IRAs, 401(k) and life insurance.
    • Update your name on the titles of all property you own.
    • For individual accounts, consider a Payable-on-Death or Transfer-on-Death arrangement to name a beneficiary.
  • Create or update your estate plan, wills, and trusts to include your spouse.

Review your financial plan and portfolio regularly to stay on track.

Download the Marriage Brochure.

New Child

A new baby brings more challenges than just changing diapers. Consider if or how you will save for college and don’t forget to update your financial plan as well.

Where Do I Start?

  • Request a Social Security number for your new child.
  • During tax season, don’t forget to add your new child as a dependent to your filing.
  • Update your budget to include diapers, formula and childcare; then adjust your spending.
  • Decide on a guardian for your child in case something happens to you and your spouse.
  • Work with a financial advisor to set up a budget for your expenses, including retirement planning and insurance.
  • Consider the benefits of purchasing life insurance for your child.

Necessary Types of Insurance and Estate Planning

  • Make sure all family members are covered by health insurance.
    • Notify HR or insurance provider of your new dependent.
    • Review options to get the most cost-effective combination of deductibles and coverage.
  • Consider life insurance in case something happens to you.
    • Coverage should be enough to pay off debts and provide for your child.
  • Review disability insurance options, which may be necessary to replace your income in the event of illness.
  • Review/update beneficiary designations on your 401(k), IRA, and life insurance.
  • Create or update your estate plan, including wills and trusts.

Funding your Child’s Education

Get expert insight on how to prepare for rising college costs.

  • Grants
  • Financial Aid
  • Investment Savings

Go to www.studentaid.ed.gov for more information about financial aid

  • Estimate how much you need to save for college.
  • Consider your college savings plan options and choose an account.
  • Set up monthly deposits and add extra funds when possible. A regular investment plan, even in small increments, can add up over time.

Did You Know?

According to the U.S. Department of Agriculture, as of 2011, the average cost of raising a child from birth to age 18 in a middle income family was $226,920. *1

The average undergraduate cost including tuition, room and board for the 2009-10 academic year was $13,248 for colleges in the UW System. *2

The average cost of 2009-10 tuition for Wisconsin’s Technical Colleges was approximately $3,282 per semester, not including books, room and board, or other incidental fees. *3

During their working years, college graduates earn over 66% more than typical high school graduates. *3

1. US Department of Agriculture
2. www.collegeboard.com, inc. Rates based on Wisconsin residency.
3. 2010 Education Pays, published by the College Board

Download the New Child Brochure.

New Job

Job changes bring challenges and opportunities. Consider your options for your employer-sponsored plan and make sure you take full advantage of your new plan.

Getting Started

  • List all monthly income and expenses.
  • Reassess your long-term financial plan.
  • For an Introductory Financial Planning Consultation, contact the Investment Centre

Leaving Your Old Job

  • Discuss important financial considerations with human resources.
    • Ask when your health, disability and life insurance will expire.
    • Calculate unused vacation, sick pay, and other compensation due.
    • Find out how long you have to exercise any vested stock options.
  • Decide how to make the most of your retirement plans.
    • Discuss your options with a financial advisor.
  • Save all documents relating to your separation from the employer.
  • If you are moving for your new job, notify your former employer of your new address.
    • Go to www.irs.gov to see if your moving expenses are tax-deductible.

Starting Your New Job

  • Ask detailed questions about your total benefits package.
    • Find out when health care coverage begins and look into COBRA to avoid uninterrupted coverage.
  • Find out what retirement plans are available and sign up as soon as you are eligible.
    • Ask about a company match and the vesting schedule
  • Request direct deposit to maintain continuity of payroll deposits.
    • Payments will reach your account the day the check is issued.
    • Banks may offer advantages with direct deposit.
  • Update your employer contact information with service providers.
  • Estimate your federal and state income tax liabilities.
    • A change in salary may change your tax bracket, and require changes to withholdings (W-4), tax payments and investment strategies.
    • Talk to a tax advisor if you need additional help.
  • Keep investing to ensure maximum growth over time.

Determine your Goals and Make your Move

Option 1: Consolidate your accounts through a rollover.

  • If you want the continued tax-savings and growth of your assets, you can roll them into a tax-qualified plan with your advisor.
  • Provides an opportunity to consolidate your retirement savings in one place.
  • More opportunity for a wider range of investment choices.
  • Greater control over your investments since you are no longer bound by plan rules.

Option 2: Keep your assets with your current plan.

  • If you’re not sure which direction to take, you can leave the money where it is.
  • By staying in your current plan, you continue to defer paying taxes on your before-tax savings.
  • Your employer may automatically cash you out or do a forced rollover if your account balance is $5,000 or less.

Option 3: Cash out your Assets.

  • Provides immediate access to your funds.
  • May cause you to lose part of your assets to income taxes and possible penalties.

Download the New Job Brochure.

Divorce

There are two parts to a divorce to consider, the first dividing the assets and the second, learning how to manage finances as an individual.

Before the Divorce

  • Schedule a meeting with a divorce attorney, if you haven’t already.
  • Take an inventory of all assets and categorize as shared or individually owned.
  • List all income and expenses to see where you stand financially.
  • Think about the best way to divide retirement account assets.
    • To divide IRA assets, you must submit a judge signed divorce decree, and occasionally, the settlement agreement.
    • The transfer of IRA assets is not taxable when assets are awarded to the former spouse per divorce decree.
  • Think about the best way to divide brokerage account assets.
    • Typically divided easily without court documents.

Begin Managing Finances as an Individual

  • Take the necessary steps to change your name, if changing it.
    • A copy of your court order can be used in the process.
  • Review and update files for all personal property and accounts.
    • Update your will and estate plan.
    • Update beneficiaries for your life insurance, IRAs, and other retirement plans.
    • Update health insurance records.
    • Update your name on the titles of owned property.
  • Request a copy of your credit report to check for accuracy.
  • Update your income tax filing choices and W-4 as needed.
  • Update your investment strategy to fit your new life.
    • Identify future goals, such as paying for children’s college tuition and retiring comfortably.
    • For guidance, set up an appointment for an Introductory Financial Planning Consultation at the Investment Centre.
    • Continue to save and invest for your retirement.

Did you Know?

  • Over the past 20 years, the divorce rate among people between the ages of 48 and 66 has increased by more than 50 percent. *1
  • Divorce typically occurs during economic hardship for a couple. *2
  • In the US, over 50 percent of first marriages, 67 percent of second marriages, and nearly 74 percent of third marriages end in divorce. *3

What’s his is hers….and what’s hers is his. Do you live in one of the following community property states?

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

You may want to consult with a divorce attorney familiar with the law in these states. You'll be subject to somewhat different rules for spousal liability.

*1. U.S. Census Bureau Data
*2. http://www.princeton.edu/futureofchildren/publications/docs/04_01_08.pdf
*3. Harrar, Sari and Rita DeMaria. 2007. The 7 Stages of Marriage: Laughter, Intimacy, and Passion. Pleasantville, NY: Reader’s Digest Books.

Download the Divorce Brochure.

New Wealth

New wealth can come from a variety of sources whether you recently sold your business, home or land, won the lottery, or received a bonus. Depending on the amount and your current situation, you may decide to just spend it all, or you may decide to put the money to work to achieve long term goals.

Where to Start

  • Keep the money in a relatively safe place until you have a plan.
  • Reevaluate your personal finances.
    • Assess your assets and liabilities.
    • Pay off high-rate consumer debt and reconsider other liabilities.
  • Decide what goals you would like to achieve with the new wealth.
  • Get help from qualified financial, tax, and legal advisors.

Steps for Planning & Investment

  • Consider a professional and comprehensive review of your finances.
  • Discuss tax status, net worth structure, cash flow and insurance.
  • Review your overall insurance needs and determine if you still have the right level of life, health, and liability insurance.
  • Create or update your estate plan.
  • Consider the advantage of giving to charity.
  • Work with your financial advisor to begin investing or update your current plan to match your goals.

Inherited Propery

  • Find out the federal or state tax consequences and what is due.
    • In 2011 the federal estate tax exemption was $5 million; any assets inherited below that amount are exempt from federal taxes.
    • Check with state inheritance tax officials to see if taxes are due, especially if decedent resided in another state.
  • Consider selling investments or property that doesn’t fit your financial plan or goals.
  • Inherited retirement accounts may be treated differently. Contact your financial advisor to determine how to make the most of those accounts.
    • For inherited employer-sponsored plans, such as a 401(k), contact the plan sponsor to learn your options.

Download the New Wealth Brochure.

Family Loss

When a member of your family dies, many aspects of your life may suddenly change. At this time of grief, it may be difficult to make the decisions necessary to carry out the final affairs of your loved one.

Where to Start

  • Consult with a professional advisor knowledgeable in estate matters.
  • Request several certified copies of the death certificate.
  • Collect and organize legal and financial documents.
  • Beware of anyone preying financially on surviving family members.

Managing the Affairs of Your Loved One

  • Contact the family attorney, CPA, and estate’s executor.
    • Discuss estate probate, preparations for a final tax filing, and updating the survivor’s estate documents.
  • Contact the advisor of your family member to freeze the account and start the ownership transfer process.
  • Notify the credit reporting agencies (Equifax, TransUnion, and Experian) of the death.
  • Review and update information on personal accounts and property.
    • Beneficiary designations, health and life insurance, and property titles.
  • Ask about survivor benefits or payments owed to the deceased, which may include the following entities:
    • Social Security Administration, insurance companies, former employers.

Duties of the Executor

  • Consult with an estate attorney or other professional for guidance.
  • Take an accurate inventory of the assets of the deceased.
  • Obtain a nine-digit federal tax ID number from the IRS for the estate.
  • Officially open the estate and begin probating the will (if there is one), by filing the appropriate documents with the county in which you are the executor.
  • Notify all beneficiaries.
  • Notify creditors of their right to make a claim against the estate.
  • Financially manage the estate.
    • Collect unpaid monies due to the deceased including salary, insurance, and employee benefits.
    • Use the estate’s funds to pay outstanding bills owed.
    • Manage any property or business interest until passed on to the heirs.
  • Keep record of important dates along with income and expenses.
  • File final income tax returns for the deceased:
    • Federal, state, and local income taxes must be paid, in addition to estate taxes.
    • Personal income tax returns are filed on the normal due date.
    • Estate tax returns are due nine months after death.
  • Prepare a final accounting to the estate for the probate court.
    • Show proof of creditor notification, paid bills, and taxes due.
    • A thorough accounting of any income earned or disbursements made by the estate after the death.
    • Distribute remaining assets to heir per the provisions of the will or trust.

Inherited Assets

  • Consult with a tax advisor to assess any taxable consequences on the inherited assets.
  • Ask your financial advisor how to make the most of inherited retirement accounts.
  • Work with your advisor to assess whether the inherited assets fit into your financial plan.

Download the Family Loss Brochure.

Living in Retirement

Retirement requires extensive planning, from budgeting and determining how much income you need to satisfy your needs to making a decision on how to receive that income from your savings or other sources.

Manage Your Finances in Retirement

  • Create a regular stream of income.
    • Determine a cash flow plan for retirement income.
    • Adjust your asset allocation strategy for different stages of retirement.
    • Understand the required minimum distributions (RMD) for your retirement plan to avoid penalty.
  • Stay flexible with various investment choices to manage risk exposure to market fluctuations.
  • Review your asset allocation and, if necessary, work with your advisor to rebalance your portfolio.
  • Combine your cash flow planning with portfolio rebalancing
    • Remove the cash you need from your portfolio.
    • Generate additional cash as you rebalance by selling asset classes that have appreciated the most.
  • Periodically review your health and life insurance coverage as your needs may change.
    • Check beneficiary designations.
    • Consider a gifting plan.
    • Make sure accounts are titled appropriately.
  • Have an Emergency Cash Account, just in case.
    • Consider placing 2 to 4 years of spending needs in deferred annuities, CDs, or short-term bond funds.

Determine your Goals and Make your Move

Option 1: Consolidate your accounts through a rollover.

  • If you want the continued tax-savings and growth of your assets, you can roll them into a tax-qualified plan with your advisor.
  • Provides an opportunity to consolidate your retirement savings in one place.
  • More opportunity for a wider range of investment choices.
  • Greater control over your investments since you are no longer bound by plan rules.

Option 2: Keep your assets in your current plan upon retirement.

  • If you’re not sure which direction to take, you can leave the money where it is.
  • By staying in your current plan, you continue to defer paying taxes on your before-tax savings.
  • Your employer may automatically cash you out or do a forced rollover if your account balance is $5,000 or less.

Option 3: Cash out your Assets upon Retirement.

  • Provides immediate access to your funds.
  • May cause you to lose part of your assets to income taxes and possible penalties.

Benefits of Delaying Retirement

  • Workers who delay retirement may earn more money, accumulate additional Social Security, and build wealth in employer-sponsored pensions.
  • Working longer may extend retirement savings, by reducing the number of years over which Social Security, pensions and other wealth are spread.
  • Delaying retirement by five years would enable individuals, on average, to increase annual retirement spending by 56 percent.
  • If all workers delayed retirement by five years, the additional Social Security taxes would offset more than half of the Social Security shortfall projected for 2045.*1
  • 75 percent of workers aged 50 and older expect to have retirement jobs in the future. *2

*1. The Urban Institute Aug. 2006 Fact Sheet.
*2. Study by Families and Work Institute and the Sloan Center on Aging & Work

Download the Living in Retirement Brochure