A major change in your circumstances has financial consequences. Here are some of the factors to consider when you have...
MOVED
If your capital gains on your home sale exceed $500,000 (married) or $250,000 (single), you can increase your basis by adding sums spent on home improvements, such as room additions and kitchen renovations (but not routine repairs) - as long as you keep receipts.
CHANGED JOBS
Are you a new agent who previously worked at a company with a retirement plan? An IRA rollover might give you more disirable control over your investments rather than leaving your retirement fund with your previous employer. Also, evaluate the sufficiency of your emergency fund, life insurance, disability insurance, and health plan.
HAD A BANNER YEAR
Look at way to reduce taxable income in 2007 and beyond. Year-end tax planning should address this year and next.
GOTTEN MARRIED
You may need guidance re-evaluating your investment portfolios in light of your new joint goals. Decide how to title assests and consider the wisdom of setting up trusts to protect a spouse or children from a previous marriage.
ENDED A MARRIAGE
Your entire financial plan must be reviewed upon separation and divorce. Look at insurance needs, child support, retirement plans, college goals and investment objectives.
ADDED TO THE FAMILY
Having a child is a financial investment. Review everything, from the monthly budget (Loss of one income? Child care expenses? A bigger house?) to the retirement plan. Life insurance is critical now, and it's never too early to start that college fund.
LOST A SPOUSE
Loss of a spouse is a major life event and requires a serious review of all areas of the financial plan. As with divorce, raw emotions may prevent you from tackling everything at once. But always tend to the most important concern, which is helping you feel confident in your ability to pay the bills and carry on.
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