Cyber Safety Tip: Update
We’ve all been there. You’re scrolling through your phone, computer, or tablet, and a notification pops up.
“Update Me!”
While that isn’t the exact wording, the meaning is the same. Something wants to be updated to the most recent version. But the banner gets in your way, and you tab it to the side, thinking you will get to it later.
Then we forget it.
This doesn’t seem like a big deal. But it turns out updating your programs can be one of the easiest ways to make your life safer in the long run.
Some software updates contain security measures that help patch vulnerabilities that could lead to a cyberattack. They may include safety features that help keep intruders out if your phone is hacked or stolen.
So the next time you get an annoying pop-up asking for an update, take the extra time and get your device up to speed.
It could be the easiest security upgrade you ever have.
PRO TIP: Some antivirus programs can check your device for updates and keep you current (though it may cost extra, so read up before you click).
The Best Laid Plans
Even the most thought-out financial strategy may need to be adjusted for unexpected events, such as changes to your family life or career, or shifts in your family priorities. These are important opportunities for you to connect with our team and ensure that any necessary adjustments are made to accommodate your new or shifting goals.
Some of the most common life events that may prompt a change include:
- New child or grandchild
- Large purchase (home, vacation property, college, etc.)
- Death in the family
- Employment changes (retirement, new job, promotion, etc.)
- Health and disability
Reasons Not to Write Your Own Will
Ever considered writing your own will? While you can draft a will on your own, there are plenty of reasons why you may not want to go that route. Most people do it to save money, but they may overlook or forget to take care of some important details – details that could eventually cost them much more than the amount they could save. Some of the biggest mistakes include:
Ignoring state law differences. Will kits and online wills may not always take state laws regarding the administration of probate into account. An estate planning attorney can inform you of these state laws; a will kit or website may not.
Not revoking an earlier will. Many wills contain boilerplate language that automatically revokes any preceding will. If you are writing your will totally on your own (some people still do), you may not realize the necessity of such a clause.
Assumptions. If you will property to an heir, what happens if you outlive that heir? What if you will an asset to a friend or relative today and that asset is gone when your will is executed someday? These are important things to contemplate; things that most people who write their own wills have not considered.
Vagueness. Sometimes executors are not given enough power by the language of a will. Sometimes a home will be left to a spouse, but with no one assigned to pay for upkeep of the home during the rest of that widow’s lifetime. Alternate executors are sometimes omitted from wills, and names of nonprofit groups can easily be misstated or misspelled, inviting complication and possible dispute of charitable intent.
Keep in mind this article is for informational purposes only and is not a replacement for real-life advice. You may want to consider consulting a legal professional before making any changes to your estate strategy. Instead of searching the Internet or the Yellow Pages for a stranger, ask your Shepherd Financial wealth advisor for a referral.
Life Insurance at an Early Age
Perhaps you’ve heard the maxim, “Preparation is the key to success.” But when it comes to life insurance, knowing when to prepare is almost more important than the preparation, itself.
Sure, it can be difficult to think about life insurance as early as your 20s, but life moves pretty fast sometimes. Before you know it, you’ll be in your 30s and possibly supporting a family. Even if you have a different life plan, taking care of those who matter most is always a wise move.
Many consumers believe they simply can’t afford life insurance on top of all the other bills they pay at an early age. That’s a valid concern! After all, you should never engage in any sort of financial venture beyond your means.
Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
Insurance can be an intimidating topic, but it doesn’t have to be. Even if right now isn’t the best time to purchase life insurance, discussing the future is a smart move.
National Estate Planning Awareness Month
October is National Estate Planning Awareness Month. Have you created or updated your estate plan?
Plan for tomorrow (today).
That seems like sensible advice, doesn’t it? Yet a surprising number of people leave no estate plan in place for their survivors. It makes a certain amount of sense. Nobody likes talking about death. But this is exactly why you should make an effort to create and maintain an estate plan: you simply won’t be there to settle matters when the time comes.
Everyone has an estate.
Someday, it will be someone’s job to account for the things you leave behind when you die. This goes for homeowners and renters, those who are retired, those who are working full-time, and everyone from every walk of life.
Everyone needs an estate plan.
Without your instructions, it could be decided in court. If you don’t leave behind an estate plan, your family could face major legal issues and, potentially, bitter disputes. Your estate plan may include wills and trusts, life insurance, disability insurance, guidance on the care for children and other dependents, powers of attorney, a living will, medical directives, anatomical donation directives, a pre-or post-nuptial agreement, extended care insurance, charitable gifts, debts, passwords, digital assets, and more.
Why not just a will?
While your will may state who your beneficiaries are, they may still have to seek a court order to have assets transferred from your name to theirs. Estate planning can include items like properly prepared and funded trusts, which could help your heirs to avoid probate. Probate can be an expensive process and lock up assets during the time they’re needed most.
Beneficiary designations on qualified retirement plans and life insurance policies usually override bequests made in wills or trusts. Many people never review the beneficiary designations on their retirement plan accounts and insurance policies, and the estate planning consequences of this inattention can be serious. Having an estate plan means keeping the estate plan updated, as time passes or changes happen in your family.
Where do you begin?
We recommend that you speak with a qualified financial professional – one with experience in estate planning. Please contact us so that we can refer you to a good estate planning attorney and a qualified tax professional, and from there assist you in drafting your legal documents.
National Life Insurance Awareness Month
September is National Life Insurance Awareness Month, so it’s a great time to review your coverage.1 If you don’t have any life insurance, you’re not alone. Life insurance is one of those ‘someday’ things for many people, but the cheapest time to buy it is probably today.
There are two kinds of life insurance: term and permanent. Additionally, there are three kinds of permanent life insurance: whole, universal, and variable.
How do these forms of life insurance differ, and how do you find out which type of coverage is right for you? The way to find out is to look at where you are in life, so that you can assess your current insurance needs. Have you reviewed your insurance lately? Don’t think you need life insurance? If so, consider the following potential factors that may make it a good idea:
You have a spouse or partner
You have children
You have an aging parent or disabled relative who depends on you for support
Your household depends heavily on your income
Your retirement savings or pension won’t be enough for your spouse or partner to live on should you pass away
You own a business, either solely or with partners
You have a substantial joint financial obligation, such as a personal loan for which another person could be legally responsible after your death
In any of these circumstances, you may require life insurance. If you have coverage, changes in your life may demand an update.
The affordability of life insurance may surprise you. Many people think it is expensive, and so often, it is not. A 20-year term life policy with $500,000 in death benefits can cost you less than $70 a month.2 Life insurance is intended to help your loved ones financially after you die. The proceeds from a life insurance policy may help your spouse, partner, or family members manage finances if they have to adjust to life without your income. The death benefit may also be used to meet funeral costs and other final expenses, which may run into the tens of thousands of dollars.
Are you still unsure about buying life insurance, or do you suspect that your current insurance coverage needs to be updated? Our team would be happy to assist you in evaluating all the factors and help you choose an appropriate policy.
1. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
2. ValuePenguin.com, 2023. Based on a male in excellent health.
Considerations During Medicare’s Open Enrollment
How long has it been since you’ve reviewed your Medicare policy? With open enrollment fast approaching, there are a few questions you may want to ask yourself before you renew, add, drop, or switch coverage.
Have you switched doctors, or is your doctor no longer accepting your current plan? Or maybe your prescription drug needs have changed, and your Medicare plan doesn’t cover everything you need. Maybe you’re paying too much for your coverage and need to make adjustments. If you’ve reviewed your Medicare plan and realized you don’t quite have the coverage that you want, you can make changes during the fall open enrollment period. From October 15 – December 7, 2024, you can add, drop, or switch Medicare plans. Any changes will be effective on January 1, 2025, as long as the changes are submitted by the deadline.
Reviewing your Medicare coverage is an important part of your financial and insurance strategy. If you have any questions or need help navigating this process, reach out to the Shepherd Financial team.
Your Financial Resolutions
The new year always seems like a great time to overhaul everything in our lives. Why not? It’s a clean slate. A chance for something different. The perfect opportunity to try and correct mistakes from the past year.
It can be enticing to do the same thing for your investment portfolio – turn it over, dump everything out, and try again. This may feel especially tempting during seasons of market volatility. But unless something has changed with your investment time horizon, objectives, or risk tolerance, there’s really no good reason to do it.
The market experienced an unusually long period of low volatility, so even seasoned investors may feel unsettled with recent drops. Keep in mind, though, volatility is a normal part of market cycles. As we head into a new year, it’s helpful to approach your portfolio and resolutions with a similar attitude:
Maintain perspective. Uncertainty is a constant, and downturns happen frequently. Unforeseen circumstances pop up, so sustaining new behaviors isn’t always realistic. Take a breath and keep moving forward.
Stay disciplined and set realistic expectations. Implementing a quick fix that doesn’t make sense for your long-term goals is similar to trying to time the market. It can be extremely challenging and could end up costing you in the long run. For example, on December 24, 2018, the Dow Jones dropped 653 points – its worst-ever performance on Christmas Eve. Just two days later on the 26th, however, the Dow added over 1,080 points – its biggest points gain in history.
Ask for help. Utilizing an advisor may help ensure your investment strategy aligns with your long-term goals, timeline, and risk tolerance. As with other goals in your life, this level of accountability can help prevent you from making emotional investing decisions.
Despite rising interest rates and worries about trade wars between China and the US, the US economy remains strong: growth is healthy, unemployment is low, the number of people working is rising steadily, and wages are up. As long as you maintain a strategy consistent with your needs and preferences, there is no compelling reason to change your investment discipline.
But it doesn’t hurt to check in on your financial goals and current circumstances – call the Shepherd Financial team to schedule your next review.
The Dow Jones Industrial Average is a widely-watched index of 30 American stocks thought to represent the pulse of the American economy and markets. Investors cannot invest directly in an index.
It’s Time for ‘The Talk’
Valentine’s Day reminds us now is the perfect time for ‘the talk’ with that special someone in your life. And since this is a financial blog, I obviously mean the money talk. True, communication can be challenging, and the topic of money is a sore spot for many people. But the more you can speak honestly about money, the less fear and anxiety will be wrapped around it. The dialogue may look different based on your relationship status and life stage; regardless, it’s important to have the conversation now, as well as make room for future conversations.
You may benefit from making individual financial balance sheets, including all your debt and savings, before you begin talking. This way, you’ll have a better idea of your net worth. You may also compile a list of money questions or concerns you’d like to cover. It’s worthwhile to discuss your current financial situation, share values and long-term goals, and talk through spending and saving habits. Not being willing to talk about money can lead to big issues, both now and down the road. Open communication, though, gives the opportunity to create shared vision for the future, tackle problems as a team, and have accountability for your financial decisions.
Determine your own money values. This is where you’ll examine if you value saving or spending, as well as think about the various lifestyle standards you have. If you’re single and value the ability to travel, you’ll likely take that value into a relationship. Potential partners may discover conflicting values. Married couples may disagree about saving for college for their kids versus boosting their own retirement savings. It’s ok to disagree, but finding common ground is key. And keep the big picture in mind: creating safe space for ongoing dialogue about a positive financial future.
It’s also critical to come clean about your financial baggage. If you have student loan debt or a spending habit you’re having trouble kicking, hiding the issue will only compound it. (Literally – interest either hurts debtors or helps savers, but it doesn’t sit still.) Once you’ve talked about where you’ve been and where you are, look ahead. Are there any financial obstacles ahead? What are you hoping to do with your money in the future? Highlighting these can help you better see how to actually plan for the future.
Of course, not every money conversation needs to be so in-depth, but it helps to check in at least once a month to ensure you and your partner are on the same page, spot any problem areas quickly, and maintain momentum toward your goals. Your first financial talk together may be a little awkward, but with time, you’ll become fluent in a shared money language.
Here We Go Again
It’s easy to see why January is considered the start of new things – there’s a fresh calendar year and a plethora of resolutions get shouted from the rooftops. This feels like a chance to hit the reset button in many areas of life. At this point, you can see the race has a clearly-defined finish line – and it’s 12 months away. Of course, for some people, January is really right in the middle of the action. Maybe you’re gearing up for your second semester and looking at a somewhat shorter distance to the finish line.
No matter the length of your particular race, though, it’s helpful to have a good idea of what you’re getting into. As runners will tell you, there is a vast difference between sprinting 100 meters and grinding out a marathon. From race preparation and strategy to gauging your pace along the way, you will benefit from having a plan in place before your feet ever leave the starting line. At Shepherd Financial, we believe financial wellness is one important piece of whole-life wellness. So while we hope financial goals are part of your plan (and want to help you set and achieve those goals), don’t stop there. Pause and think for a moment about how financial well-being could positively impact the rest of your life. Do you want to pay off debt? Save more for retirement? Increase your charitable giving? Send your kids to college? Travel more? We can help you create a plan and work toward those goals.
It’s also important to realize not all runners are built the same. If you’re a sprinter, don’t force yourself into strapping on a hydration belt to run 26.2 miles. Set yourself up for success by running your race. You may find it useful to set smaller goals with shorter timelines. We believe each of our clients has a unique lens with which they see the world. Getting to know you, as well as your strengths and weaknesses, is part of our process – if we craft a financial plan that doesn’t fit your specific needs, it doesn’t make sense to pursue it.
Don’t forget your running buddies! When you head out to pound the pavement for a few hours, it’s nice to know you have a support system by your side. Think through what you want to accomplish, then find the teammates who will encourage you to get there. Because our focus is creating retirement-ready individuals, our team is constantly producing new tools and educational resources. We love finding customized solutions for retirement plan sponsors, participants, and individuals.