[et_pb_section fb_built=”1″ admin_label=”Image Section” _builder_version=”4.6.5″ _module_preset=”default” background_image=”https:\/\/springwaterwealth.com\/wp-content\/uploads\/2020\/10\/Retired-Couple-Enjoying-Walk.jpg”][et_pb_row admin_label=”Image Row” _builder_version=”4.6.5″ _module_preset=”default” custom_padding=”112px||365px||false|false”][et_pb_column type=”4_4″ _builder_version=”4.6.5″ _module_preset=”default”][et_pb_text admin_label=”Image Text” _builder_version=”4.6.5″ _module_preset=”default” header_font=”Roboto Slab||||||||” header_text_align=”center” header_text_color=”#ffffff” header_font_size=”60px” header_line_height=”1.8em”]<\/p>\n
The\u00a0transition to retirement can be a challenging one.\u00a0 After working for decades, and focusing on saving for the future, you now have to depend on those savings to provide income to supplement your Social Security benefit and, in some cases, a pension.<\/p>\n
Preservation of wealth is a top concern for millions of retirees.\u00a0 One study showed that 70% of Americans\u00a0fear outliving\u00a0their money in\u00a0retirement more than death itself. They\u2019re worried that they\u2019ll have to change their standard of living, reduce their level of care, and, possibly, go back to work.<\/span><\/p>\n Fortunately, there are things you can do today to ensure a secure retirement. We\u2019ve outlined five of the best steps you can take below.<\/span><\/p>\n <\/p>\n <\/p>\n <\/p>\n Visualizing an ideal retirement is an important part of financial planning for seniors. A good financial plan<\/strong><\/a> will help you define and prioritize what\u2019s important to you. Naturally, income in retirement is a top priority. But there are also things you\u2019ll need to spend money on, like health care (which tends to increase in price more than other goods and services), periodic home maintenance and upgrades, replacement cars, and, potentially, care at home or in a facility later in life. And you\u2019ll definitely have things that you may want to spend money on, too \u2013 like travel, education and support for your kids or grandkids, and charitable giving and philanthropy.<\/p>\n Once you\u2019ve defined and prioritized your goals, you and your financial planner can start to figure out how to pay for them.<\/p>\n <\/p>\n You might think of your portfolio<\/a><\/strong> as the engine for your plan. Its performance fuels the growth of your investments over time.<\/p>\n Many people mistakenly think that the key to investing success is buying \u201chot\u201d stocks \u2013 like finding the next Microsoft or Google, or \u201ctiming\u201d the market \u2013 knowing when to buy and sell ahead of a market rise or fall. If this sounds a lot like looking into a very cloudy crystal ball, it is \u2013 and the dismal track record<\/a><\/strong> of investors who try to beat the market with these strategies should be all the proof you need that it\u2019s the wrong approach.<\/p>\n At Springwater, we know from decades of academic research the factors that will largely determine the performance of your portfolio \u2013 and they\u2019re things that a disciplined, professional advisor can help you control, like asset allocation (your \u201cmix\u201d of investments), diversification (owning a variety of investments that perform differently over time), taxes and fees, and, perhaps most importantly, your emotions.<\/p>\n It\u2019s important to keep in mind that in investing, risk and return are related; if you want to earn more return on your portfolio, you have to accept more investment risk (with risk defined as the variability of your portfolio\u2019s returns). And unfortunately, this risk-return relationship isn\u2019t linear \u2013 in fact, you have to take on ever-larger amounts of investment risk if you want to generate more return.<\/p>\n So, at Springwater, we believe your investment strategy should be designed to take as little risk as possible, while still helping you achieve your goals. Your financial plan will help you determine that level of investment risk.<\/p>\n After all, when we look back on a life well-lived, we don\u2019t celebrate the average return we earned on our investments, but we do remember the experiences we shared with those most important to us.<\/p>\n <\/p>\n Diversification involves owning investments which will respond differently to the same market or economic event. For instance, when the economy is growing, stocks tend to out-perform bonds. But when things slow down, bonds often perform better than stocks. By holding both stocks and bonds, you reduce the impact on your portfolio when markets swing one way or the other. The same holds true for other types of investments you could include in your portfolio, like real estate, cash and more.<\/p>\n One of the biggest investment challenges is managing portfolio withdrawals when stock prices are declining. For retirees, this is a very real risk. You\u2019ve retired, and so are no longer contributing to your investment and retirement accounts \u2013 you\u2019ve shifted from accumulation mode to distribution mode. At the same time, your investments in stocks are declining in value. Mathematically, this is the worst possible scenario \u2013 taking distributions<\/strong><\/a> from a portfolio that\u2019s declining in value.<\/p>\n Since we know that the stock market typically experiences a significant correction on average once every seven to ten years, how can you minimize this very real risk? By ensuring that your portfolio has a mix of investments that are expected to perform differently over time, including high-quality bonds and cash.<\/p>\n Why? If you have high-quality bonds and cash in your portfolio, they\u2019ll maintain their value even as the stocks you own fall in price. You can then sell some of your bonds and use the proceeds, together with your existing portfolio cash, to cover your distributions, allowing the stocks time to recover their value.<\/p>\n At Springwater, we typically have one to two years\u2019 worth of your anticipated distributions in investments that shouldn\u2019t decline in value even when the stock market gyrates. A well-diversified<\/a><\/strong> portfolio, that includes bonds and cash in the investment mix, will help you preserve wealth when the stock market is volatile.<\/p>\n <\/p>\n A Required Minimum Distribution, or \u201cRMD<\/a><\/strong>\u201d, is a withdrawal you\u2019re required to make from most retirement plan accounts by the time you reach age 72.<\/p>\n You probably recall that your contributions to your 401(k) or 403(b) plan at work, or to your IRA, were made with pre-tax dollars. That\u2019s to say, you didn\u2019t pay any tax on the income<\/a><\/strong> you contributed to the account.<\/p>\n The earnings in your account also were never taxed, they just continued to compound year after year.<\/p>\n But, your 401(k), 403(b), or IRA aren\u2019t tax-free accounts, they\u2019re tax-deferred<\/em> accounts.<\/p>\n So, when you reach age 72 or retire, the IRS requires you to begin taking withdrawals from your account, and those withdrawals will be taxed at ordinary income rates.<\/p>\n There is an exception to the age 72 rule, and it is: if you\u2019re either a 5% (or greater) owner of the business sponsoring the retirement plan, or if your RMD is for an IRA, you have to start your withdrawals in the year you turn 72 even if you\u2019re not retired yet.<\/p>\n Also, Congress changed the age at which you must start your RMDs. If you were born on or before June 30, 1949, you were required to start your withdrawals in the year you turned 70 \u00bd. If you were born on or after July 1, 1949, your withdrawals must begin in the year you turn 72.<\/p>\n The minimum amount you\u2019re required to withdraw is calculated each year, using a simple formula and table that the IRS provides. You just divide the value of your account at the end of the prior year by a divisor from the appropriate IRS table, which you can find on their website or in Publication 590. Here\u2019s a simple example:<\/p>\n Fred is unmarried, and turned 80 this year. The value of his account at the end of last year was $400,000. He looks up the divisor for his current age in the IRS\u2019s Uniform Life Table, and sees that it\u2019s 18.7. So, he divides $400,000 by 18.7 to arrive at his RMD, which for this year is $21,390. That\u2019s the minimum amount he must withdraw before the end of the year.<\/p>\n If you have more than one IRA or 403(b) account that\u2019s subject to RMDs, the IRS will ask you to calculate the figure for each account separately, but allow you to take the total amount from any one (or more) of your accounts.<\/p>\n That\u2019s not true, though, for retirement accounts like 401(k) or 457(b) plans. You\u2019ll have to take your RMDs separately from each one for those.<\/p>\n It\u2019s important to make sure that you take your RMD before the deadline, because the penalties for taking out too little, or missing it completely, are pretty severe. The amount you should have taken out but didn\u2019t is taxed at 50%. This is on top of the income tax you already owe on the distribution. Fortunately, most financial services companies now send you a form to remind you of the amount you\u2019re required to withdraw.<\/p>\n Finally, just to make matters even more confusing, RMDs for inherited IRAs and retirement plans are treated differently than those that must be taken by the original account owner.<\/p>\n <\/p>\n For years, financial advisors and accountants recommended that their clients use the \u201cconventional wisdom\u201d strategy for spending down a portfolio to generate income<\/a><\/strong> in retirement. The approach used this withdrawal order:<\/p>\n First, spend down taxable accounts, like checking and savings accounts, and brokerage accounts. Next, spend down tax-deferred accounts, like traditional IRAs, SEP and Simple IRAs, 401(k) and 403(b) accounts, etc. Then, spend down tax-exempt accounts, like Roth IRAs. Finally, spend down non-deductible IRAs, non-qualified annuities, and the cash value from permanent life insurance policies.<\/p>\n For retirees who needed to start taking Required Minimum Distributions, this sequence would change only slightly, with the RMDs necessarily being withdrawn first, followed by the taxable accounts.<\/p>\n But, you may have opportunities to take withdrawals from your tax-deferred accounts when those dollars will be taxed at unusually low rates. That would likely include years before your RMDs begin, and years when you have large tax deductions, such as high medical expenses. Reducing the portion of distributions lost to taxes will extend the life of your portfolio, and is key to the preservation of wealth<\/a><\/strong>.<\/p>\n When you\u2019re retired and taking distributions from your portfolio to generate income, one objective should be to minimize the average marginal tax rate on withdrawals from your tax-deferred accounts like IRAs and 401(k) plans.<\/p>\n Once you have a marginal tax bracket in mind, you can start by withdrawing funds from your tax-deferred accounts (part of which may be your RMDs) so long as they are taxed at a rate below your target marginal rate. Then, you can make additional withdrawals from your taxable account, as necessary. If you\u2019ve depleted your taxable account, and you have tax-exempt Roth assets, the withdrawals from your tax-deferred accounts can be supplemented with distributions from your Roth account.<\/p>\n <\/p>\n Planning for a secure retirement<\/a><\/strong> can be challenging, so having the right resources to guide you along the way is crucial. One of the best resources you can have is a financial advisor<\/a><\/strong> who specializes in financial planning for seniors.<\/p>\n You should approach finding a financial advisor as you would selecting a doctor or other trusted professional. You shouldn\u2019t take it lightly. Unfortunately, many people end up with an advisor who approached them socially or who was referred by a relative, friend, or coworker. Too often that doesn\u2019t work out very well.<\/p>\n There are two steps to selecting an advisor. First, identify several candidates who meet a set of objective criteria. Then, interview those advisors and select the one you trust and with whom you have the best rapport.<\/p>\n What are the objective criteria?<\/p>\n Once you find 2-3 advisors who meet these objective criteria, interview them. Select the advisor who feels like a trusted friend who cares about you.<\/p>\n An easy way to find local fee-only financial advisors is through websites like the CFP Board<\/strong><\/a>, the National Association of Personal Financial Advisors<\/strong><\/a>, and the Garrett Planning Network<\/strong><\/a>. These sites let you search by location to find advisors in your area.<\/p>\n When you meet with a financial advisor, be sure to verify their credentials, areas of expertise, fiduciary status and method of compensation. Don\u2019t be afraid to be direct in your first meeting. Ask any questions that are important to you. If you don\u2019t like the answer an advisor gives you, find another advisor.<\/p>\n Keep interviewing advisors until you find someone with whom you feel comfortable and trust. A good financial advisor will be a lifelong partner and guide. Someone you can turn to with any financial concerns,<\/a><\/strong> and who will be dedicated to helping you achieve all of your financial goals.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”3.22.3″ background_color=”#0060a5″ custom_padding=”14px|0px|0|0px|false|false” global_module=”4205″][et_pb_row column_structure=”1_3,1_3,1_3″ _builder_version=”3.25″ custom_padding=”27px|0px|27px|0px|false|false”][et_pb_column type=”1_3″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”PDX Office Address” _builder_version=”3.27.4″ text_font=”Montserrat||||||||” text_text_color=”#ffffff” z_index_tablet=”500″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px”]<\/p>\n OUR LOCATIONS<\/strong><\/p>\n Our Portland office is conveniently located off the SW Denney Road exit from Highway 217.<\/p>\n 6600 SW 105th Avenue, Suite 155 Our Bay Area office is located in downtown Santa Cruz.<\/p>\n 133 Mission Street [\/et_pb_text][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”Schedule Consultation” _builder_version=”3.27.4″ text_font=”Montserrat||||||||” text_text_color=”#ffffff”]<\/p>\n SCHEDULE A FREE CONSULTATION<\/strong><\/p>\n If you’d like to learn more about how we can help you build a solid plan for your future, let us know by filling out our contact form. Or give us a call at (888) 998-4796.<\/p>\n [\/et_pb_text][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text _builder_version=”3.27.4″ text_font=”Montserrat||||||||” text_text_color=”#ffffff”]<\/p>\n CONNECT WITH US<\/strong><\/p>\n Want to keep up with the latest news from Springwater? Follow us across our social networks.<\/p>\n [\/et_pb_text][et_pb_social_media_follow _builder_version=”4.2.2″][et_pb_social_media_follow_network social_network=”twitter” url=”https:\/\/twitter.com\/SpringwaterWM” _builder_version=”4.2.2″ background_color=”#00aced” follow_button=”off” url_new_window=”on”]Twitter[\/et_pb_social_media_follow_network][et_pb_social_media_follow_network social_network=”facebook” url=”https:\/\/www.facebook.com\/SpringwaterWealth\/” _builder_version=”4.2.2″ background_color=”#3b5998″ follow_button=”off” url_new_window=”on”]Facebook[\/et_pb_social_media_follow_network][et_pb_social_media_follow_network social_network=”linkedin” url=”https:\/\/www.linkedin.com\/company\/springwater-wealth-management\/” _builder_version=”4.2.2″ background_color=”#007bb6″ follow_button=”off” url_new_window=”on”]LinkedIn[\/et_pb_social_media_follow_network][\/et_pb_social_media_follow][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" Preserving Wealth Post-Retirement: 5 Steps You Should Be TakingThe\u00a0transition to retirement can be a challenging one.\u00a0 After working for decades, and focusing on saving for the future, you now have to depend on those savings to provide income to supplement your Social Security benefit and, in some cases, a pension. Preservation of wealth is a […]<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":5362,"menu_order":3,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"The decision to divorce is one of the most significant decisions you will make in your lifetime. It has profound implications. It can affect your entire family (kids, parents, siblings, etc.) your friends, and where you live. It may affect your physical health, your mental health, and your career. It can also affect you financially.\r\n\r\nYou\u2019ll want to seek advice and support from a variety of experts who can support you during this challenging transition. You should work with a family law attorney to understand and address the legal aspects of divorce. You might want to consult with a family counselor\/therapist to work through the personal and family issues associated with divorce. You may wish to seek the advice of a financial planner\/advisor (Certified Financial Planner\u2122, Chartered Financial Consultant\u00ae, or Certified Divorce Financial Analyst\u00ae) who can help you navigate the many financial ramifications of divorce.\r\n\r\nWe are not attorneys and this guide is not designed to provide legal advice. We are also not licensed therapists, and, therefore, we are not trained to help you with the personal issues you will face. We are financial planners, and we hold the CFP\u00ae, ChFC\u00ae, and CDFA\u00ae credentials. We have decades of experience providing financial guidance and advice to women who are contemplating, going through, newly emerging from, and\/or living long after divorce. This guide is designed to help you prepare for, negotiate, avoid the mistakes of, and live beyond divorce.\r\n\r\n Table of Contents<\/strong>\r\nChapter 1: How Women Can Prepare Financially for Divorce<\/a>\r\nChapter 2: How Women Can Negotiate Financially in Divorce<\/a>\r\nChapter 3: How Women Can Thrive Financially After Divorce<\/a>\r\nChapter 4: Going through Divorce? -\u00a0 Surround yourself with Financial Experts<\/a>\r\n<\/p>\r\n
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Chapter 1: What Sort of Life Do You Want in Retirement?<\/a>
Chapter 2: Be Risk-Smart with Your Portfolio<\/a>
Chapter 3: Diversify Your Investments<\/a>
Chapter 4: Understand Your RMDs<\/a>
Chapter 5: Be Tax-Smart with Creating Your Retirement Income<\/a>
Chapter 6: Consider Hiring a Fee-Only Financial Advisor<\/a><\/div>\n
\n<\/a>1: What Sort of Life Do You Want in Retirement?<\/h2>\n
<\/a>2: Be Risk-Smart with Your Portfolio<\/h2>\n
<\/a>3: Diversify Your Investments<\/h2>\n
<\/a>4: Understand Your RMDs<\/h2>\n
<\/a>5: Be Tax-Smart with Creating Your Retirement Income<\/h2>\n
<\/a>6: Consider Hiring a Fee-Only Financial Advisor<\/h2>\n
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Beaverton, OR 97008<\/p>\n
Santa Cruz, CA 95060<\/p>\n
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\r\n1: How Women Can Prepare Financially for Divorce<\/h2><\/a>\r\nMost of the biggest decisions we make in life have financial implications.\u00a0 Deciding where to go to college.\u00a0 Deciding on a career.\u00a0 Deciding where to live.\u00a0 Deciding whether or not to have children.\u00a0 All of these decisions impact you financially.\u00a0 However, none of them affects you as much as a\u00a0divorce<\/a><\/strong>.\r\n\r\nBecause women often delegate financial responsibility to their spouses, they are often not as familiar with their household finances.\u00a0 This means that they may not have thought about the financial impact of divorce on women.\u00a0 So, let\u2019s consider how you can\u00a0prepare financially<\/a><\/strong>\u00a0for divorce.\r\n\r\nA good place to start is with spending.\u00a0 What are you spending to live currently?\u00a0 What will change if you divorce?\u00a0 Presumably, either you or your spouse will move to a different living environment.\u00a0 If you remain in your current home, will you be able to pay the associated costs (mortgage\/rent, taxes, insurance, utilities, maintenance)?\u00a0 If you decide to move, what are those costs likely to be?\r\n\r\nWhat about health insurance?\u00a0 Are you on a plan that will continue after divorce?\u00a0 If not, how will you obtain coverage and what will it cost?\u00a0 Do you need life insurance?\u00a0 If so, how much and what kind and what will it cost?\r\n\r\nDo you expect to receive alimony from your ex-spouse?\u00a0 How much and for how long?\u00a0 If you have children, what about child support?\u00a0 How much child support and for how long?\u00a0 What about paying for your children\u2019s education (e.g. private school, college, grad school)?\r\n\r\nWhat financial assets (e.g. home, property, pensions, retirement accounts, investments, etc.) do you and your spouse own?\u00a0 What are the tax characteristics of these assets?\u00a0 How are they likely to be divided in a divorce?\r\n\r\nIf you have been out of the workforce, do you plan to return to work?\u00a0 Is returning to work an imperative?\u00a0 Do you have current skills, credentials, knowledge, and experience?\u00a0 If not, will you need to go back to school?\u00a0 How much would additional schooling or training cost?\u00a0 Once you are back at work, how much do you expect to earn?\r\n\r\nAs you might imagine, you will probably need advice as you think through these questions and prepare financially for divorce.\u00a0 You should talk to a family law attorney about all of the legal aspects of divorce.\u00a0 You should consult with a financial advisor (Certified Financial Planner\u2122, Chartered Financial Consultant\u00ae, or Certified Divorce Financial Analyst\u00ae) about the financial aspects.\r\n\r\nDivorce can be a very difficult experience.\u00a0 You can minimize the financial impact by preparing and planning ahead.\r\n\r\n
\r\n2: How Women Can Negotiate Financially in Divorce<\/h2><\/a>\r\nIf you have decided to divorce your spouse, there are several ways in which you can approach the process.\u00a0 If you and your spouse are on good terms and your situation can be simple (e.g., no kids, limited assets, no legal complexity, and good collaborative spirit with your partner), you might be able to \u201cdo it yourself.\u201d\u00a0 You would follow the laws in your county and state and complete the documents necessary to dissolve your marriage.\r\n\r\nIf your situation is more complex (kids, significant assets, legal complexity) and you and your spouse are on good terms as you discuss ending your marriage, then you might consider a collaborative approach.\u00a0 This process involves working with a team to negotiate an agreement to end your marriage.\u00a0 The team typically includes attorneys (one for you and one for your spouse), a divorce coach, a financial specialist (Certified Divorce Financial Analyst\u00ae), and, if you have children, a child specialist.\u00a0 The group will work together to achieve a dissolution agreement that will avoid litigation in court.\r\n\r\nIf you and your spouse are in dialogue, but struggling to come to terms on your divorce, you should consider mediation.\u00a0 This is true regardless of the complexity of your situation.\u00a0 In mediation, you and your spouse hire an attorney (or you each hire an attorney) to help you sort through and resolve the areas of conflict as you pursue the end of your marriage.\u00a0 The goal of mediation is to reach an agreement about the dissolution without going to court.\r\n\r\nIf you and your spouse are in unhealthy conflict and none of the other methods will work, then you will be forced to pursue a litigated dissolution.\u00a0 This is the least desirable approach, because it is contentious, unpleasant, public, and expensive.\r\n\r\nWhat are the financial\u00a0issues<\/strong><\/a>\u00a0that are negotiated in the dissolution of a marriage?\u00a0 Alimony (i.e. payments by one spouse to the other for the support and maintenance of the other spouse) and child support (i.e. payments by one spouse to the other to care for children and keep them in the same general standard of living they experienced before the divorce) are the most common.\r\n\r\nIf you and your spouse have accumulated assets, you will need to decide how to divide them between the two of you.\u00a0 Your home is probably the most obvious shared asset.\u00a0 Who will live in it?\u00a0 Will it be sold?\u00a0 Is there a mortgage?\u00a0 How will you divide the value of it?\r\n\r\nWhat about retirement assets?\u00a0 Do either of you have pensions, employer-sponsored retirement accounts (e.g. 401(k), 403(b), deferred compensation), IRAs, and Roth IRAs?\u00a0 What about employer stock and stock options?\u00a0 Remember that retirement assets are typically tax-deferred (i.e. the income tax due is deferred until distributed in retirement).\u00a0 That means that they are worth less than the stated value, because taxes will eventually be deducted from them.\r\n\r\nHow about other assets such as investment accounts, insurance contracts (cash value life insurance, annuities) loans to others, coin collections, intellectual property (patents, copyrights, trademarks), businesses, vehicles (cars, trucks, RVs, boats, etc.), timeshares, rental property, timeshares, raw land, collections, antiques, artwork, and household goods and furnishings?\r\n\r\nAre there debts to others (e.g. credit cards, home equity loans, personal loans, unpaid taxes)?\r\n\r\nHow do you value your assets?\u00a0 In some cases, there is a ready market that provides current values (i.e. stock in a publicly traded company).\u00a0 However, in many cases, you will need a professional appraisal of the asset.\u00a0\u00a0 You may need multiple appraisals, if you and your spouse cannot agree on an initial appraisal.\r\n\r\nAnything of any significant value will become part of the settlement process.\u00a0 Yes, there may be prior agreements between you and your spouse that segregate certain assets, but you will still need to come to an agreement about who gets what. Also, state law (e.g. community property law) may determine how assets are divided.\r\n\r\nYour objective in the financial part of the settlement process should be to identify all assets (and liabilities), obtain proper fair market value for them and determine how you would like them divided between you and your spouse.\u00a0 You may need the help of an attorney, tax professional, a financial planner (Certified Financial Planner\u2122, Chartered Financial Consultant\u00ae, or\u00a0Certified Divorce Financial Analyst\u00ae<\/strong><\/a>), and appraiser(s).\r\n\r\n
\r\n3: How Women Can Thrive Financially After Divorce<\/h2><\/a>\r\nIf you are just emerging from divorce, you are probably trying to reassemble your life.\u00a0 You may have just travelled through one of the darkest chapters in your life.\u00a0 But you made it to the other side.\u00a0 Now let\u2019s look at how you can thrive financially after divorce.\r\n\r\nThe place to start to rebuild your financial life is, perhaps curiously, to take care of yourself.\u00a0 Focus on your health.\u00a0 Make sure your diet is nutritious.\u00a0 Exercise several times each week.\u00a0 Get plenty of sleep (7- hours).\u00a0 Keep alcohol consumption to a minimum.\u00a0 Don\u2019t smoke and avoid recreational drugs and other dangerous behavior.\u00a0 Surround yourself with positive, uplifting people.\u00a0 Practice your religion or meditate or do whatever you do to nurture your inner self.\r\n\r\nOnce you are feeling better about yourself, you can start thinking about your financial life.\u00a0 Start with an assessment.\u00a0 What are your assets and liabilities?\u00a0 These make up your balance sheet and the difference between the two of them is your net worth.\u00a0 What are your sources of income?\u00a0 Perhaps you are working or soon will be working.\u00a0 How much will you earn?\u00a0 Are you receiving alimony?\u00a0 How much and for how long?\u00a0 What about child support?\u00a0 Will you have other income from, say, rental property?\r\n\r\nNow that you know how much income you will have coming in, let\u2019s consider your expenses.\u00a0 Do you know what you were spending before you got divorced?\u00a0 How will that change?\u00a0 Did you move?\u00a0\u00a0 What are your fixed costs for housing (mortgage\/rent, tax), utilities, insurances (personal, property, and casualty), cell phone, cable TV and internet, gym membership, groceries, transportation, entertainment, etc.?\u00a0 What about your variable expenses for vacations, home repair and maintenance (e.g. appliances), vehicle replacement?\u00a0 The more precise you are in identifying and projecting your expenses, the more confident you will be about your financial future.\r\n\r\nBefore we go any further, let\u2019s step back and acknowledge that you should be saving for any large future expenditures that are not in your core living expenses.\u00a0 That means saving for vacations, replacement vehicles, your children\u2019s education, and, above all, retirement.\u00a0 The best way to organize your finances is to save first and spend second.\u00a0 Most people spend first and save second, if there is anything left to save and too often there isn\u2019t.\r\n\r\nWhat do you do if your income is not big enough to save the way you need to and spend the way you want to?\u00a0 Well, you will have to make some tough decisions.\u00a0 What\u2019s most important to you?\u00a0 Do you need to live in the house you shared with your ex-spouse?\u00a0 Do you need to take as many vacations?\u00a0 Can you trim your cable TV package?\u00a0 Could you change jobs and earn more?\u00a0 What about taking on a second part-time job?\u00a0\u00a0 Try to find ways to reduce your expenses and\/or increase your income, so that you can save what you need to save and spend what you want to spend, but saving is your priority so don\u2019t compromise it.\r\n\r\nIn the wake of a divorce, there are some other tasks you need to take in order to be financially secure.\u00a0 You should change the beneficiary designations on your retirement accounts, your insurance policies and your \u201ctransfer-on-death\u201d accounts.\u00a0 You should check in with the\u00a0Social Security<\/a><\/strong>\u00a0Administration and clarify your benefits.\u00a0 If you were married for ten or more years, you will qualify for benefits based on your ex-spouse\u2019s record and those benefits may be larger than your own. (You receive the larger of the two.)\u00a0 If there are mistakes in your earnings record, you can correct them.\u00a0 You should establish an emergency fund that contains enough cash to pay for a large, unexpected expense or pay your basic, fixed living expenses for 3-6 months if you become unemployed for some reason.\u00a0 You should update your\u00a0estate plan<\/strong><\/a>\u00a0(will, durable power of attorney, and health directive).\r\n\r\nAs you might imagine, to work through and accomplish these financial tasks, you may need assistance from a financial advisor (Certified Financial Planner\u2122, Chartered Financial Consultant\u00ae, or Certified Divorce Financial Analyst\u00ae), insurance agents, tax professional, and estate planning attorney.\r\n\r\nThe key to thriving financially after divorce is developing a sound plan and following it.\r\n\r\n
\r\n4: Going through Divorce? -\u00a0 Surround yourself with Financial Experts<\/h2><\/a>\r\nThere are a lot of issues to consider as you go through a divorce.\u00a0 They fall into categories: legal,\u00a0financial<\/a><\/strong>, tax, and investment.\u00a0 Let\u2019s consider the issues and who can help you navigate them.\r\n\r\nUnless you plan to execute your own divorce (i.e. do-it-yourself) in your legal jurisdiction (state and county), you will need to hire an attorney who can walk you through the process of dissolving your marriage.\u00a0 While most attorneys are capable of guiding you, we suggest you work with a family law attorney who focuses on divorce.\u00a0 You can find family law attorneys by searching on your state bar\u2019s website, asking other professionals for a referral, or doing a simple internet search.\u00a0 You should interview 2-3 and select the person who is most qualified and with whom you have the best personal rapport.\r\n\r\nIf you are likely to receive alimony from your ex-spouse, your divorce attorney will help you negotiate an amount and a payment period that is fair.\u00a0 If you have children and expect to receive child support, your attorney will also negotiate those payments.\r\n\r\nDivorce results in a tangle of financial issues.\u00a0 What are the marital assets, what are they worth and how will they be divided?\u00a0 How much income will you have after your divorce?\u00a0 Will that be enough to support you?\u00a0 What will you do for insurance?\u00a0 How will you save for retirement?\u00a0 What will be your Social Security benefits?\u00a0 What happens if your ex dies and your alimony and child support end?\r\n\r\nThere are various financial advisors who can help you with the different financial issues you will encounter in your divorce.\u00a0 A financial advisor can help you with many aspects of\u00a0personal finance<\/a><\/strong>\u00a0<\/strong>(budgeting, insurance, taxes, estate planning, investments, education funding, retirement planning).\u00a0 Look for a fee only planner who does not sell financial products and earn commissions.\u00a0 The Certified Financial Planner\u2122 and Chartered Financial Consultant\u00ae credentials are the most respected credentials held by financial planners.\u00a0 If you feel you need particular expertise in the area of divorce financial planning, look for a\u00a0Certified Divorce Financial Analyst\u00ae<\/a><\/strong>.\u00a0 You can search for a CFP\u00ae at the\u00a0CFP Board website<\/strong><\/a>\u00a0and a CDFA\u00ae on the\u00a0Institute for Divorce Financial Analysts website<\/a><\/strong>. The American College awards the ChFC\u00ae designation, but there is no way to directly search for one on its website.\r\n\r\nIf you have difficult-to-value assets, you should hire an appraiser.\u00a0 The American Society of Appraisers confers\u00a0four appraisal credentials<\/a><\/strong>\u00a0<\/strong>related to the subject in need of appraising.\u00a0 There is a \u201cFind an appraiser\u201d tool on its\u00a0website<\/a><\/strong>.\u00a0\u00a0\u00a0 If you are trying to value a business, consider hiring an accountant with the Accredited Business Valuation (ABV) credential.\u00a0 There is a credential directory tool on the\u00a0AICPA website<\/a>.<\/strong>\r\n\r\nIf you need tax-specific advice, work with a Certified Public Accountant (CPA) or an Enrolled Agent (EA).\u00a0 The state society of Certified Public Accountants will often have a tool on its website that allows a consumer to find a CPA.\u00a0 You can search for an enrolled agent on the National Association of Enrolled Agents\u00a0website<\/a><\/strong>.\r\n\r\nWhat about insurance?\u00a0 If you need help with personal insurance including life insurance, disability insurance, annuities and long term care insurance, consider working with a Chartered Life Underwriter (CLU\u00ae).\u00a0 The American College bestows the CLU credential, but there is no search tool on its website to find a CLU.\u00a0 If you need help with health insurance, consider working with a Chartered Healthcare Consultant\u00ae (ChHC\u00ae), Registered Health Underwriter (RHU\u00ae) or Registered Employee Benefits Consultant (REBC\u00ae).\u00a0 All of these credentials are administered by the National Association of Health Underwriters, and there is a \u201cfind an agent\u201d tool on its\u00a0website<\/strong><\/a>.\r\n\r\nIf you need assistance with your investments, there are two credentials for which you should look.\u00a0 The Certified Financial Planner\u2122 (CFP\u00ae) and the Chartered Financial Analyst (CFA) designations.\u00a0 The latter can be found on the CFA Institute website on their\u00a0member directory<\/strong><\/a>.\r\n\r\nYou will need to update your estate plan. While most attorneys are capable of doing this, consider working with an estate planning attorney.\u00a0 These attorneys work more narrowly on estate planning matters.\u00a0 As with family law attorneys, you can find an estate planning attorney on your state bar\u2019s website.\r\n\r\nFor all of these professionals, you can, of course, ask for referrals from other friends, family members, and other professionals you know or conduct a search on the internet.\u00a0 It is always wise to interview 2-3 experts before selecting one to serve you.\r\n\r\nDivorce is a complex process with many and varied financial consequences.\u00a0 Surround yourself with experts to avoid pitfalls and achieve the very best outcomes.","_et_gb_content_width":"","_mi_skip_tracking":false,"footnotes":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/pages\/5289"}],"collection":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/comments?post=5289"}],"version-history":[{"count":0,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/pages\/5289\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/pages\/5362"}],"wp:attachment":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/media?parent=5289"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}