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A New Year’s Resolution That Will Last Forever.

1172270549Today’s Struming is an oldie, but a goodie. It’s a repeat Struming that’s important every year.

As we begin 2020, committing to resolutions are popular pastimes. The most popular one is our desire to lose weight. They almost never work but a more lasting resolution is to get your finances in order.

If you follow this advice, you and your family will be the beneficiaries of these resolutions for years to come. These suggestions come in the form of important tasks that are mandatory for all of us, young and old. They are not cheery tasks, but ultra-important ones. So here they are:

1. Create a will

If you aren’t going to die, a will is not necessary. For the rest of us who will someday leave this earth, it is mandatory. You might say, “A will is not necessary. It’s all going to…wife/kids/person/charity/etc.”. Not so, unless you write it down. If you don’t have a will, the state will decide who gets what. Are you OK with that? In fact if you don’t have a will, don’t waste time reading the rest of this article. Stop here and get it done. Start by writing down your wishes and then you can get a lawyer to draft a simple document. (PS: Reread this document annually as well since circumstances and your wishes can change). And surely if your marital status changes or you have children and/or grandchildren this may change your wishes.

PS An important detail: your beneficiary designation on your 401ks/IRAs supersede your will. This is a really important detail for divorcees who forgot to change beneficiaries. This means your ex could be your beneficiary if this isn’t updated. That’s OK if that was your intention. But I suspect for most it is not. So, pay attention.

2. Power of attorney with DNR provisions

What if you can’t make decisions for yourself? Who will do so? Do you want to be kept on life support? No? Then say so. You need to establish a health-care power of attorney with an explanation of how you’d like to be treated in case of incapacity. BTW, looking into a long term care policy is a very smart thing to do, particularly if you are in your 50s when premiums would be lower.

3. Annual net worth calculations

This takes a little work but is well worth it. Do the math. Include all asset items—savings, checking, investments, 401Ks, IRAs, real estate etc. Include all liabilities—mortgages, loans, etc. In the end it’s simple math–Assets minus liabilities equals net worth. You might want to segregate long-term retirement stuff (401Ks, IRAs) from other investments. I suggest you chart his minimally once a year. Measure your progress. What gets measured, gets managed.

4. A short-written document with all pertinent info

Phone numbers, people to call, documents in a single place. It’s critical to create a simple to do list. This should include real estate info, insurance policies, retirement accounts, etc–The whole shebang. I have a purple bucket in my home with all these documents. All family members know where it is, and on the top of the bucket is a simple 3-page document called. “If something happens…” Don’t make it hard for a bereaved spouse, child, other to try to sort through your documents.  Having a simple list of numbers, documents, people to call and things to do is one of the biggest gifts you can give your family if you have an untimely passing. Do it once and then it’s easy to update once a year.

You may not be able to lose weight in 2020 or get a big raise, or get a better job, but if you organize your finances properly, you’ll earn more while you are living and better provide for your family when you’re gone. That’s a resolution with lasting power.

Best wishes for a happy and healthy 2020 ahead. And my hope for Championship #28 for the Yankees ahead.




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3 Comments

  1. ks says:

    All great advice. I agree 100% with every sentence in this article, minus the last one. (Mind you, I have zero faith that the Phils are any closer to Championship #3 despite a much-needed managerial change). Happy 2020 to you and yours, Lonny.

  2. Rich Riley says:

    Lonny,

    Outstanding summary and as important today as it was the first time you published it. Thanks.

    Rich

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