Wealth Planning Newsletter | Q3 2022


Is Your Financial Plan Up To Date?

Whether you are currently saving for retirement, nearing retirement, or in retirement, it is important to revisit your financial plan at least once a year or as your financial situation changes to ensure you remain on track to fulfill your lifetime goals.

Pay Off High Interest-Bearing Debt

Review your credit cards, personal loans, car notes, etc., and pay off or consolidate any high interest-bearing loans.

Review Your Expenses

Consider deferring big ticket expense items and trimming discretionary expense items, if possible, this year.

Bolster Your Savings

Max out your 401k ($20,500/year single filer | $27,000/year age 50+) and, if eligible, your health savings account ($3,650 per year single plan | $7,300 per year family plan | + 1,000 catch up contribution if age 55+). Consider forgoing tax breaks on contributions to the pre-tax 401k in exchange for creating a tax-free bucket of future income in retirement via the Roth 401k.

Fully Fund Your Emergency Savings


Preparing estate planning documents for your children before they go to college this fall probably didn't make it on your to-do list. However, it is essential to discuss with your children executing power of attorney, medical power of attorney, and HIPPA disclosure authorization before they head back to campus. Once a child reaches 18-years-old, parents can no longer automatically make medical or financial decisions on behalf of them. Below is a quick summary of each document:

Power of Attorney

A power of attorney will allow your college student to appoint an agent to act on their behalf regarding their financial affairs. This includes managing bank accounts, paying bills, and filing taxes.

Medical Power of Attorney

A healthcare power of attorney is a legal document naming an individual as a medical agent on their behalf if they become medically incapacitated. If one is not in place, you may have to petition with the court to be named guardian of your own child.

HIPAA Disclosure Authorization

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) protects individuals' health care information. Suppose your college student gets in an accident and has not signed a HIPPA form. In that case, getting information from the health care provider will be extremely difficult if they are incapacitated. Signing a HIPPA Disclosure Authorization will allow health care providers to share medical information about your child.

College is an exciting time for both parent and child; they are on their own for the first time, and you may be adjusting to being empty nesters. These documents can leave you and your child with peace of mind as they head back to campus.


Travel Budget

Your travel arrangements will determine the amount of money necessary for your trip – domestic travel vs. international, driving vs. flying, hotel vs. staying with family/friends, amongst others. Creating an itinerary including sights and activities is helpful to develop an idea of how much you may spend while away. Establishing a dedicated savings account and contributing to it on a regular basis in advance will help to alleviate a lot of the financial stress that comes with travelling. You can also track your expenses using a simple spreadsheet or a travel app to gain additional insights into your travel habits, which can be helpful for future travel plans.

Preparing Credit Cards

Reach out to your credit card companies and let them know you will be out of town to lessen the chances of your card being frozen due to potentially fraudulent activity. Credit cards can be a boon as they allow you to accurately track where you’re spending money. Having a couple of card options (or ApplePay) in the event of losing one can also be beneficial.  

Exchange Rates

If you venture outside the U.S., the exchange rate of U.S. dollars to another currency will affect your budget. Being aware of exchange rates allows you to understand how far each U.S. dollar will stretch. If your preference is to use debit and credit cards for travel expenses, your bank and credit card company will offer more favorable exchange rates (beware of airport stores and kiosks). Be mindful of international fees, if any, assessed by your bank and credit card company when overseas.

Stay On Top of Your Financial Obligations

While traveling, you’ll want to immerse yourself in the experience. If you have any impending bills that are due during your trip, either pay prior to departure or automate altogether. Online bill pay can permit you to manage expenses with ease.  

Travel Insurance

Your U.S. health plan may have limited or no global coverage and you never know when you’ll have to deal with unforeseen medical issue including COVID-19. Travel insurance can cover medical costs and transportation and save you from paying doctor bills out of pocket. International health insurance can offer coverage for extended trips beyond the benefits offered by traditional travel insurance.


What Is It and Is It Right for You?

Some colleges and universities have systems in place for tuition refunds in case a student must withdraw from school. These are often due to medical reasons or other serious challenges. Not every school offers this. If your child must leave in the middle of a semester, you will most likely lose the tuition you paid for that semester.

Tuition insurance allows you to recoup lost college costs if your child leaves for qualifying reasons. You can get back the money you spent on tuition as well as any fees, room and board, and other expenses. In some cases, tuition insurance may also cover you in the event your child contracts COVID-19, but this varies from plan to plan.

It is also important to note that tuition insurance will not cover every reason for leaving school. In most cases, you will be reimbursed only if your child leaves for a medical reason. This will require a note from a doctor and the policy will only cover the semester your child is leaving. Each policy has its own rules and exceptions so be sure to understand yours before you purchase. While most students don’t plan on leaving school early, it can happen. Tuition insurance can provide a backup plan to protect your investment.