Getting Squared Away

By Scott Spiker

Journey

The Online Magazine from First Command Financial Services

Finding Balance PrintRSS

Take Time to Review Your Health

If you’re like many Americans, you probably take the time to see your doctor and dentist for regular checkups. Just as you keep up with your physical health, it’s also important to keep up with your financial well-being.

This year began with an increasing number of Americans feeling the ill effects of the economic turmoil, according to the First Command Financial Behaviors Index, a monthly survey that assesses the financial behaviors, attitudes and intentions of middle-income Americans. Results of the Index’s February survey indicated 68 percent of respondents said they lost money in their retirement accounts, up five points from 63 percent in January. And 51 percent said they lost money in stocks, up from 47 percent in January.

Interestingly, financial confidence appears to be strengthening among those who are planning for the future. In December 53 percent of respondents with a financial plan said they did not feel financially stretched, up from 48 percent in September. Confidence among those without a plan actually slipped four points to end the year at 33 percent.

Make a plan to regularly meet with your First Command Financial Advisor to review how your investments are doing and take a look at whether you’re still on track to reach your financial planning goals. A doctor may tell you to lower your cholesterol or boost your exercise routine to keep healthy, and your Advisor may have similar advice for your financial health. Here are a few key items to check over with your Advisor.

 

Breaking Free

If you find yourself with assets worth less — or more — than they were when you drew up your will or created a trust, it may be time to review your estate plan.

Changing Assets
If you’ve earmarked certain assets — a stock portfolio and real estate, for example —for certain heirs, and one asset has either significantly increased or decreased in value, you may need to rethink the way you’ve divided them. Instead of leaving specific assets to each heir, you may want to designate amounts or percentages. That way, if one asset is worth more than another, your estate will still be divided as you’ve planned. And remember, if you’ve purchased or sold assets such as real estate, make sure to update your plan to reflect the new value of your assets.

Charitable Giving Revisited
If you’d planned on giving assets to charity but now find you need them for your family, you’ll have to adjust your plan. Or, perhaps you’ve designated particular assets to go to charity, but the value of those assets has declined. If you want to give the same amount, you’ll need to earmark additional assets for your bequest.

Making your estate plan flexible may help it weather changing asset values. Your First Command Advisor can help by referring you to a local attorney or CPA, at your request, and work with them to develop an estate plan. And your Advisor will work with First Command Bank’s Trust Services department to establish any trusts that are part of the estate plan. The bank’s trust officers can provide all the fiduciary services required to administer your trust to help you preserve, protect and enhance your financial legacy. Smart financial decisions can help you make the most of your resources. To learn more, contact your First Command Financial Advisor today.

» Investment Performance
A review of your investments may reveal that some of them have not performed as expected. While some may have performed well, others may have performed poorly. Your Financial Advisor can help you decide if your investments are still right for your plan or if it’s time to choose some different investments.

» Risk Tolerance
An impending life change, such as retirement, can have an impact on your investment time horizon, and that can alter the amount of risk you are willing to take with your investments. Your Financial Advisor can help you adjust your portfolio so that your investments are in line with your current needs.

» Investment Diversification
One way to help protect your portfolio from investment risk is to diversify your investments. Choosing a mix of different types of assets typically lessens investment risk and the overall impact if one asset type performs poorly. Your Financial Advisor can help you review your portfolio to make sure it is appropriately diversified or help you adjust your investment mix.

» Other Issues
Your meeting with your Financial Advisor is also a good time to discuss other planning issues. Is your estate plan up to date? If not, you may want to have your financial professional coordinate with your attorney in updating estate documents. If there have been any changes in your family — births, deaths, marriages, or divorces — you may need to modify your estate plan.

You also may want to review your life insurance coverage. Is it still adequate for your current needs? A change in your family may affect your insurance needs. Plus, if you recently purchased a home or have a child approaching college age, you’ll want to make sure your insurance will cover the mortgage or tuition costs.

» Plan To Meet
Meeting with your First Command Financial Advisor can help you take care of your financial concerns. If it’s time for a financial change, give your Advisor a call.

First Command Financial Planning, Inc. (Member SIPC, FINRA)

About the First Command Financial Behaviors Index
Compiled by Sentient Decision Science, LLC, the First Command Financial Behaviors Index assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 1,000 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly.