The markets set another all-time high last week, after the Federal Reserve cut interest rates by a quarter of a percent. Lowering interest rates boosts the economy in several ways: it makes it easier for consumers to borrow for big-ticket items like cars and home improvements, easier for businesses to borrow for expansion, and spurs investors with cash to invest in stocks with the hope of earning a higher return. At the same time, the job market is softening, and we are consistently seeing white-collar professionals take a year or longer to find new jobs.
And last week, I had friends go to the funeral of a young father, who passed away from a heart attack at 48. I also saw a post from a woman whose fiancé was in ICU, and she didn’t have the ability to make sure his bills were paid. While grief is always going to be there, some planning can prevent logistics and financial pressure from making it worse.
If you are 18 or older, you need a Power of Attorney and an Advanced Medical Directive. These documents allow you to appoint someone to make financial, legal, and medical decisions for you when you’re not able to make them yourself. Many states, including Maryland, have statutory documents. You can usually download them for free from your state attorney general’s website.
If you are married or if you have significant assets beyond your retirement accounts, you need a will. Each state has a law that dictates what happens to your estate if you die without a will. But even if you’re okay with that outcome, not having a will makes handling your estate significantly more complicated for those you are leaving behind. Having a will is a gift. Please don’t burden your family in this way. We prefer clients work with an attorney who specializes in wills and trusts. But if the only way to get it done is to use an online site, then do that.
Finally, if someone is financially dependent on your income, you need life insurance. It doesn’t have to be a big expensive whole-life or permanent policy. Inexpensive term insurance is great. You can purchase a policy that locks in the premium for 10, 20, or 30 years – enough time to raise a family and be on the path to retirement. We recommend you work with an independent agent who isn’t tied to one carrier, so that they can shop for you. As long as the carrier has an “A rating” – meaning they are financially sound – one term policy is pretty much the same as the next term policy.
Please, reflect for a moment on your family and loved ones. Then take an hour – just one hour – to give them this gift. Get your legal documents in order and consider life insurance if someone is dependent on your income.
Your action item this week is to check the beneficiaries on your accounts and insurance policies. And if you do have a will that’s over five years old, call your attorney for a review.
Check out our website at covingtonalsina.com, or our Facebook page, for more information and our upcoming educational events.
CovingtonAlsina is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.