Don’t Let Open Enrollment Go to Waste

October 21, 2016

It seems like when I start hearing people talk about pumpkin spice lattes, open enrollment season is right around the corner.  And in the last several weeks, I’ve talked to a lot of people going through the process of selecting benefits. Here are some quick thoughts regarding open enrollment that you may want to consider as you select your benefits:

Contribution rate escalator: This is a great time to sign up for the rate escalator feature of your 401(k).  If you increase your contributions by 1% per year, you will be building ever increasing momentum toward a financially secure future.

Automatic re-balancing: While you’re in your 401(k) to enroll in the rate escalator, it makes sense to sign up for the re-balancing feature as well. There are lots of studies that indicate that re-balancing your portfolio can increase your rate of return anywhere from ¼% to 1% per year. I prefer it as a risk management tool, rather than a growth tool. By never allowing one asset class to run wild and dominate your portfolio, you stand a lower risk of getting devastated if the markets in that asset class collapse.

Life insurance: Most companies allow an increase of 1x salary without evidence of insurability. I’ve talked to a number of people who have developed some health issues that make purchasing life insurance either impossible or very cost prohibitive. It may take a number of years, but if you have any issues with securing life insurance, use every annual open enrollment to increase your company-sponsored insurance benefit by 1x salary.

Disability insurance: Disability insurance is, in my opinion, the single most important insurance coverage anyone can have. At each open enrollment, make sure that you have the absolute maximum disability insurance coverage allowed.

Pre-paid legal benefits. I’ve seen articles saying that between 50% and 75% of adults don’t have a will and advance healthcare directives in place. Pre-paid legal plans are becoming more common in benefits packages and for usually under $20/month, you can get coverage that would allow you to draft these important documents.  If you sign up for one year and get your documents drafted, you will experience a tremendous return on the money spent for that benefit.

Your benefits are a key part of your total compensation. Open enrollment season is a great opportunity to make sure you’re taking advantage of them and getting your financial ducks in a row. Don’t waste it.

 

 

How to Find a Good Estate Planning Attorney

October 20, 2016

We help people with a lot of different issues at Financial Finesse, but one thing we can’t do is draft estate planning documents. So despite all those lawyer jokes we love, we do need them from time to time. But where and how can you find a good estate planning attorney?

First, make sure you hire an actual estate planning attorney. Estate planning is a specialized field that requires specific initial and ongoing education. A criminal defense lawyer who does some estate planning “on the side” may not be your best bet even if they’re your second cousin.

One place to start is with your workplace. See if your employer offers discounted legal services through either a pre-paid plan or an EAP (employee assistance program). While pre-paid plans are by definition, something you have to pay for, they can save you more in legal fees than they cost in membership fees. You can always choose not to renew after your estate planning is complete.

Another option is to ask family members, friends, and other professionals you work with for recommendations. Lawyers that you or someone else knows can be useful even if they practice in a different area because they tend to know other lawyers and which ones are most reputable. The same can be said for CPAs and financial advisers. After all, much of their professional success depends on building these relationships as a lot of their business comes from referrals.

You can also try your state or local bar association’s lawyer referral service for estate planning attorneys. You can find your local chapter’s site through the American Bar Association’s national Lawyer Referral Directory. There are also national estate planning organizations like the National Association of Estate Planners and Councils, The American College of Trust and Estate Counsel, the American Academy of Estate Planning Attorneys, the National Network of Estate Planning Attorneys, and the American Association of Trusts, Estates and Elder Law Attorneys.

Once you’ve found some prospects, don’t just hire one because they happen to be first on the list. Choosing the wrong attorney can end up costing you a lot of time and money so you’ll want to interview at least three. You might also want to check your state bar’s website to see if any disciplinary actions have been placed against them. Then you might want to ask some questions:

Who exactly will I be working with? You don’t want to find an attorney you really like only to discover that you’re handed off to a junior associate who you don’t like so much.

What are your credentials? Every attorney admitted to the bar in your state is technically qualified to practice law, but some have also obtained an estate planning specialization, a credential like the AEP (Accredited Estate Planner) designation or an LLM (Master of Laws) in an area like tax or estate planning.

How much experience do you have working with clients like me in similar situations? You don’t necessarily want to be the first person they’ve drafted this type of document for. See if you can talk to some of them.

How would you be paid? Whether you’re paying a fixed fee or an hourly rate, you’ll want some idea of what this would cost you and whether it’s worth it.

Do you have any questions for me? A good attorney will be focused on your situation and needs rather than theirs.

Finally, you’ll want to work with someone you like and trust so don’t discount the importance of personality and personal chemistry. In any case, I hope these tips help you choose a good attorney. The last thing you need is another reason for bad lawyer jokes.

 

Want more info on this or other financial topics? If you have a question you’d like answered on this blog, feel free to email me. You can also receive my future posts by following me on Twitter and/or subscribing to my posts on the blog home page.

 

The Hidden Costs Of Overlooked Benefits

July 29, 2015

August is an overlooked month. Every other month of the year has a holiday or is associated with an exciting beginning, but not August. Many of us try to sneak in one last summer weekend or some back to school shopping but other than that, August is usually a lull in the calendar. A great way to make August productive is to examine the employee benefits programs that you aren’t taking advantage of so that you know which options you do want to sign up for during open enrollment this fall. A few minutes now can help you be prepared to maximize your benefits and possibly save thousands of dollars instead of rushing through a decision or just doing what you did last year. Continue reading “The Hidden Costs Of Overlooked Benefits”