Halloween is the season for ghosts, goblins, and things that go bump in the night. But when it comes to your finances, some of the scariest surprises might not be hiding in a haunted house. They might be hiding in your finances.
Even the most organized individuals can have a few financial skeletons tucked away. As we approach the end of the year, now is a good time to open the closet and take a closer look at what might need your attention.
Have an old 401(k) from a previous employer? A bank account you haven't touched in years? Over time, it's easy to lose track of accounts, especially after changing jobs, moving, or inheriting assets.
Tracking down these accounts can give you a more complete picture of your finances. You might even discover money you forgot you had! The U.S. government even offers resources to help locate unclaimed property.
Here's a potentially frightening scenario: You carefully update your estate plan, but the beneficiary listed on an old retirement account is someone you no longer intend to inherit the money.
Certain accounts, including IRAs and life insurance policies, generally pass according to their beneficiary designations rather than instructions in a will. Marriage, divorce, births, and deaths are all good reasons to review these designations.
When was the last time you reviewed your will, trust, or powers of attorney?
An estate plan created ten years ago may not reflect your current family circumstances, financial situation, or wishes. Even if nothing significant has changed, it's worth periodically revisiting these documents with your estate planning attorney.
Some financial deadlines can come with unpleasant consequences if overlooked. Required minimum distributions (RMDs), for example, generally must be taken annually once applicable age requirements are met, and certain inherited retirement accounts have their own distribution rules. Missing a required withdrawal can result in an IRS penalty. With December 31 approaching, it's a good time to review any outstanding tax or retirement-related deadlines.
Not every financial skeleton is a serious problem, but the longer something goes unnoticed, the more complicated it can become.
Before the year ends, consider having a conversation with your XML Wealth Advisor about any accounts, documents, or planning decisions that deserve another look. A little financial housekeeping today may help you avoid some unwelcome surprises down the road.
This communication is for information and educational purposes only. This is not a recommendation for the sale or investment in any product or strategy or to be perceived as individual advice. Information presented has been prepared from sources believed to be reliable but is not guaranteed and does not represent all available data necessary for making investment decisions. Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. Forecasts do not consider the specific investment objectives, restrictions, tax and financial situation or other needs of an individual. Actual data will vary and may not be reflected here. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. The opinion expressed by this individual is based on facts and circumstances known at this time, is subject to change and does not reflect the opinions of all financial professionals of XML.