Happy Valentine’s Day! I have to admit this is one holiday that I could never get behind because of two reasons. First, were men "had to" buy women gifts or cards to prove their affection to one another, most of the time in front of others. Second, I worked in the restaurant industry for 10 years. If that's not explanation enough I would recommend you pick up a shift at your local steakhouse on this day.
While I may be scorned from the celebration I know that it’s a good reminder to keep you relationship top of mind. And if you are a financial advisor, like me, it’s the perfect time to remind you that the number one stress in relationships is MONEY.
If you are in a deeply committed relationship there is nothing more sexy than to renew your commitment to your mutual financial success. Here are some ideas to say “I do” to this month.
• Vow to protect yourselves from emergencies
During the government shutdown early this year we learned that 40% of Americans don’t have enough money set aside to handle even a $400 emergency. Whether you determine you want an amount equal to six months’ or 12 months’ worth of living expenses, vow to set aside an emergency fund in liquid, readily-accessible accounts so that you have adequate cash on hand should you need it.
• Vow to make saving and retirement planning a priority for you both
Even though retirement accounts are held separately, it’s important to have a shared vision about your retirement together. Be sure to meet with your retirement planner or financial advisor to discuss your future goals and time horizon. Other financial goals should also be prioritized so that you’re both on the same page, like saving up for the kids’ college expenses or the daughters’ weddings.
• Vow to protect your family finances by shifting risk
Along the same lines as an emergency fund, work with a financial advisor to determine how much risk you both face from other potentially life-altering events. What would happen if one of you suddenly became unable to work or function due to a disability? What if you required nursing care? What if one of you suddenly passed away?
Insurance companies offer policies designed to shift many of life’s unexpected financial risks away from your family. Be sure to compare policies offered by multiple highly-rated insurance companies to help ensure you get the best coverage for your premium dollar.
• Vow not to keep secrets about money and keep the communication flowing
Hopefully you’ve been honest from the beginning of your relationship about your level of debt, how you handle sticking to a budget, or whether or not you have a low credit score. Understanding each other’s financial position and money habits is the first part of being able to take control of your finances together in order to achieve mutual goals as a couple.
And remember that it’s important that both of you understands your overall combined financial picture, even if one of you pays the bills or the other takes the lead role in investing. Don’t delegate this, make it a point to stay in the loop with financial decisions. Even if you have separate bank accounts to handle the day-to-day finances, you both need to understand where you’re at and where you’re headed when it comes to your financial future as a couple, especially your plan for retirement.
Even if it doesn’t seem exactly romantic, talking about money can make your relationship a more perfect union for the long-term. Aiming “for richer” rather than “for poorer” together can strengthen your matrimonial bonds.
If your relationship is maturing and you are looking for a mediator to help guide you with couples financial counseling and advising. Text me (425) 610-9226 Book an appointment.
CNN, “40% of Americans can't cover a $400 emergency expense.” https://money.cnn.com/2018/05/22/pf/emergency-expenses-household-finances/index.html (accessed February 11, 2019).
Forbes, “6 Financial Vows Couples Should Take To Heart.” https://www.forbes.com/sites/judithward/2019/01/23/6-financial-vows-couples-should-take-to-heart/?ss=personalfinance#1a8149385241 (accessed February 11, 2019).
Many times at the end of my meetings, after we have discussed all the statements that they have brought and we have the projections lined up. The client will say “I had an old 401(k) but I never did anything about it. I don’t have any statements anymore and I think they changed to a different company. “
As a common occurrence I have come up with the process for your to get back your old 401(k). First, call your previous employer HR department and ask them for the current 401(k) providers. Company sponsored plans move all the participants over to the new custodian and will have the providers information to give to you.
Most likely you will have to go through the phone tree and verify your identity. At that point you will be passed along to a representative who will verify this information again and they will ask you how can they help you! This is when you are going to ask to proceed with an IRA Rollover.
What does that mean? You are no longer working at the company and you will be opening up your new account to deposit your funds into so that you can manage it on your own. You can set up an account at any custodian like Schwab, Vanguard, or TD Ameritrade. These are the market leaders for low cost trading and have a plethora of investment options.
The helpful representative will ask you if you have seen the 30 day tax notification. This notification will be provided by the company within 30 days or you can view the one in the source notes. You will have 60 days after you receive the payment to make the deposit. If you do not do a direct rollover, the Plan is required to withhold 20% of the payment for federal income taxes 1.
At that point the representative will confirm the address and name of the new firm you would like the payment made out to. This check will either be mailed to you or the receiving firm.
My Company closed down and I can’t find my 401(k)
Whether you had to resign abruptly or was terminated from your job one of the last things you think to do is rollover your 401(k) into a self directed IRA. But many people can never find the time to do this and naturally in retirement you now have all the time in the world to find that lost money. But in the case where the company has been dissolved we are here to help.
Companies are required by law to mail abandoned funds to the owner’s last known address. If they’re returned or the owner can’t be reached, the assets must be relinquished to the state. In Washington it’s easy enough to find these funds visit www.ucp.dor.wa.gov/. Then enter your first and last name then search.
You will go through a claim process to get receive these funds and will need to verify your identity. Filing electronically will be the fastest way to process your claim. Lost 401(k) holding mutual funds could take up to 90 days to process. Create your username and password to check in along the way.
When you do receive your funds make sure to deposit it into your IRA within 60 days to avoid the 20% taxation. If you need help along the way we are always here to help. Feel free to contact us at 425-610-9226
https://www.irs.gov/retirement-plans/retirement-plan-participant-notices-distributions 1 https://www.irs.gov/pub/irs-drop/n-09-68.pdf