The financial markets are in their most boring summer days as I write this column. Even news about unemployment and interest rates doesn’t seem to rock the stock market. The long-awaited recession appears elusive, and inflation appears to be waning.
Meanwhile, the anchors on financial TV programs are struggling to create interest in their world — even cheerleading for a cage match between two tech tycoons. So, is this the right time to take your eye off things financial and enjoy the longer summer days?
Or is it the perfect time to reassess and revise everything from your investment allocation to your will? I vote for the latter, since this is a great time to get the ear of your adviser, attorney, accountant and other professionals. Right now, they’re not busy putting out fires or approaching year-end deadlines.
Here are a couple of activities to consider.
Prepare for RMDs
If you’re 73 or over, you must take a required minimum distribution from your retirement funds by year-end, or face stiff penalties. The first step is to figure out how much you must withdraw. That’s based on the year-end value of all your retirement accounts last December 31.
I hope you kept your year-end statements from various brokerage and fund companies. Add up those balances and go to any online calculator (type “RMD calculator” into a search engine) and input your age and total assets to get the magic number.
Next, take a look at your investments. Where will that money come from? It can all be taken out of one account or from various accounts, as long as the total is correct. But if all your money is in stocks right now, do you want to be forced to sell at year-end? This is the time to raise some cash and put it in a money market fund. You have until year-end to take the required amount, or you can take some out now.
Check out your financial adviser
Do you really know who you’re dealing with — and how your adviser is motivated (by commissions, actions, total account value, set fees)? No wonder he or she advises you not to set aside “chicken money” in T-bills, since he or she can’t earn a commission or count that money among the assets for fee-based charges.
Go to brokercheck.finra.org to check background and previous complaints. But don’t stop there. If your “adviser” isn’t registered there, it’s a red warning flag. And disputes with a nonregistered broker outside the FINRA arbitration system could be very costly.
Update your estate plan
It’s too nice a day to die, but what if you did? What would happen to your family? Is your will or estate plan current? Did you remember to retitle your home and brokerage accounts in the name of your revocable living trust? Without doing that, the plan is useless.
Or what if you didn’t die, but were incapacitated in an accident? Have you retitled your property in the name of your revocable living trust, so your named successor could take over and pay your bills, deal with investments, and pay your kids’ college tuition out of your properly titled bank and investment accounts?
Get organized
Working Lunch
If you’ve done all the above, would your loved ones know who to contact and where to find all your investment accounts and legal documents. At TerrySavage.com there is a “personal financial organizer” form you can print out in blank, and fill out with all those important directions. Leave it where your trusted partner can find it in plenty of time to deal with your professionals if you are unable, or to plan your funeral!
Create online security
The organizer form mentioned above has pages for listing your important online accounts, with log-in names and passwords. But is your account itself secure from online predators who may get your information from a data breach at your medical provider or department store? You may think you’re unimportant in the scheme of things, but Social Security numbers are being sold for $1 apiece on the dark web. That’s often the key to your online presence.
It’s time to protect your access to all those websites — from online bill payment to shopping sites to your home/auto insurance provider. Consider a password protection service like Dashlane, where all your access is securely encrypted, whether you’re on your phone or laptop or desktop.
Yes, these may be the lazy days of summer, but there are plenty of important financial issues to deal with now that you have the time. And that’s The Savage Truth.
(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)
©2023 Terry Savage. Distributed by Tribune Content Agency, LLC.