We know you may be concerned about recent declines in the stock market. Markets go up, but they also go down. Fortunately, they go up more often than they go down.
There are things in our lives that we can control and that makes sense to focus on, especially during turbulent times. Here are some personal financial items to review that can have a positive impact on your financial future.
Review your expenses. As markets go down people start to feel like a long-tailed cat in a room full of rocking chairs, especially those in retirement. Rather than trying to chase a return or selling at a loss, consider reducing your expenses by as little as 3%. The knee-jerk reaction is to drastically reduce expenses, but that can be tough to accommodate. It’s much easier to negotiate a 3% permanent reduction in your expenses going forward.
Where to look for opportunities to reduce your expenses: review your monthly subscriptions (i.e. Hulu, Disney+, Netflix, cable, etc.); how often are you eating out (or purchasing to-go orders)?
Stay the course. If you’ve done a financial plan with your financial advisor then you should review that document and stay the course. Or now might be a good time to have it updated if it is old. We recently had a client ask if they should take Social Security early. A review of their financial plan showed that taking their social security early would drastically reduce their chances of a successful retirement. It may not seem like a big decision but it could be detrimental to your financial plan. Be sure to contact your advisor with questions, this is what we are here for!
Reduce interest rates. Rates are at an all-time low right now, so review your mortgage or student loan rates. Many lenders are offering rates in the 3-4% range for mortgages and can help you through the process. We can put you in touch with the right professional if you want to pursue these options further. New players to the field such as Sofi are offering rates as low as 4.25% on student loan refinancing. It doesn’t hurt to review your current loans and see if refinancing makes sense for you.
Review your risk management strategies. While the risk of losing income for many could not be mitigated for the coronavirus, take stock of what insurance policies you do have. Review your home/auto, life, disability, and long-term care policies to be sure that they still make sense for your individual situation.
Update estate planning documents. Be sure that you have all of your estate planning documents up-to-date. Even if you’ve had a will or trust amended recently you should make sure that your assets have your accurate beneficiary designation to match. A beneficiary designation can override a will if they don’t match and your assets could pass to someone that you didn’t intend them to.
Feel free to contact us with any questions that you might have. We are here to help you navigate these uncertain times as your professional financial partner.