As we age and our family changes, our financial lives become more complex and we are vulnerable to more blind spots. More specialization and more time to manage is required.
At Merriman, we have spent over 35 years helping our clients hand pick the right team of trusted professionals to shed light on ALL of the blind spots below.
As long as you’re contributing enough to maximize your company matching, you’re taking a great first step. When it comes to retirement plans, we encourage individuals and families to defer at least 10-15% per year, before company matching, but ideally, we advocate saving as much as the plan rules permit. Accelerating your savings into retirement can bring the benefit of making work optional sooner. Who doesn’t want that!
A great financial advisor can help you fine-tune and find the balance between short- and long-term goals. They can also help you revisit your goals on an annual basis to evaluate whether changes are needed. That way, you can proactively make adjustments and keep yourself on the right track.
BLIND SPOT #4: Not having enough property and casualty coverage
Auto Insurance
Merriman Advisor, Chris Waclawik, CFP® says:
Many people just make sure they’re covered for the state minimum, but often the state minimum is so far below what you actually need, you can have significant liability exposure. We regularly review our clients’ auto insurance policies and often recommend maximizing their auto insurance coverage and adding an umbrella policy to make sure there are no gaps.
Home Insurance
Merriman Advisor, Sarah Kordon, CFP®, CRPS®says:
Whether it’s through a homeowner’s or renter’s policy, it’s important to obtain the right level of insurance on your personal property to replace your valuables in the event of a disaster, like fire or theft. For homeowners, your policy should also cover the replacement value of the home. Don’t forget to review your coverage on an annual basis to ensure that it provides the right level of protection as your home and personal property value increases. At Merriman, we’ll work with your property and casualty insurance professional to make sure you’re protected, or if you’re not currently working with someone, we can refer you to a professional we trust.
Rental Homes
Merriman Advisor, Phuc Dang, CPA, CFP® says:
When it comes to risk and insurance planning, rental and vacation homes have their own nuances that you need to consider. Work with a professional to make sure you have proper coverage and don’t forget to review it annually. It’s also important to maintain good cost basis records, including home improvements, for the life of that property to minimize the eventual capital gain on its sale.
Umbrella Policy
Merriman Advisor, Cheryl Curran, CFP® says: Umbrella insurance is “extra insurance,” like an umbrella is extra protection against the rain, even though you have a raincoat. Think of your regular car and homeowner’s insurance as the raincoat, and the umbrella insurance as the “umbrella” you carry for torrential downpours. In situations where losses aren’t covered by your other policies, umbrella insurance can provide:
Additional lawsuit coverage.
Added coverage for defense costs.
Liability coverage for some lawsuits not covered by your underlying auto or home insurance (for example, an accident involving a boat you rented on vacation, or a slander lawsuit).
The good news is that this is one of the best buys in the insurance business. Make sure to review your coverage frequently with your financial advisor or insurance professional to make sure you’re prepared for the unexpected.
BLIND SPOT #5: Not having enough life or disability insurance
Life Insurance
Merriman Advisor Mark Metcalf, CFP® says:
If you’d like to make sure your dependents can achieve their financial objectives if you were to pass away, then you probably need a life insurance policy. The amount of life insurance you maintain should be based on your unique projected financial needs and available financial resources. For most people, these needs involve paying off a mortgage, allowing a stay-at-home spouse to continue to do so, funding college education, covering routine living expenses, and providing a financial cushion while your dependents are grieving. While every situation is unique, a typical rule of thumb is to maintain insurance of at least seven to ten times your annual salary. We help our clients periodically assess their level of coverage to make sure they have enough for their changing needs.
Disability Insurance
Merriman Advisor Aimee Butler, CFP® says:
Many people don’t realize that you and your income are your largest asset, particularly in the early-to-mid years of your career. Often a base level of coverage is available through your employer. That’s a good place to start, but it probably isn’t enough. Contrary to popular belief, Social Security isn’t a good backup. Unless your employer policy is enough to cover your current lifestyle, we recommend getting additional insurance to replace your earnings in the event you are sick or injured and unable to work.
BLIND SPOT #6: Not having the right balance of risk and reward
Merriman Advisor Alan Hensley, CFP® says:
Taking the right amount of risk is key to meeting your goals. It can be easier to stick with an investment strategy if you match your risk to your goals. In general, you should take more risk in the long-term and less risk in the short-term, but figuring out the right amount involves many different factors. A Wealth Advisor can help you evaluate those factors and manage your emotions as the market fluctuates so you can stay the course.
If you have specific thoughts about who should receive your assets after you die, a will is the only way to make sure this happens. Some of your assets are probably set up to pass just fine based on your beneficiary designations, but not all investment accounts have this option. Be sure to think about these and your personal property assets – do you want the state to decide how those are handled? It’s a good practice to review your will as your circumstances change, or at least every five years. If you’re not already working with an estate planning attorney, reach out to Merriman and we can refer you to a professional who’s a good match for your situation.
BLIND SPOT #8: Not having enough set aside for emergencies
How much to save
Merriman Advisor Frank McLaughlin, CFP® says:
Having an adequate emergency fund helps you stay prepared for the unexpected. We recommend that you have at least three months of your spending set aside, and some people may need even more. If you have a job with variable income or you know you may encounter large expenses like medical bills, you should probably set aside at least six months’ worth of expenses. That said, it’s a balance and you don’t want to have too much sitting in cash because you may be missing out on higher earnings potential.
Finding the best rate
Merriman Advisor Charlene Carter, CFP® says:
It’s also important to make sure your emergency money is in an FDIC-insured savings account, preferably one that earns at least 2% APY. If you’re not sure you have enough saved, or if you need help finding the most competitive savings rate, we can help.
BLIND SPOT #9: Not planning ahead to care for dependents
Merriman Advisor Eric Jonson, CFP® says:
Your loved ones’ ongoing care is very important and requires detailed planning. Whether it’s having enough for college or taking care of your parents, a Certified Financial Planner can help you make sure your plan is fully viable. You never know when the unexpected may hit, and the peace of mind you get from a completed plan is invaluable.
High-deductible health plans have become more popular lately as they are lower cost (for the employer and you) and allow you to save pre-tax dollars into a health savings account. The downside is that they also carry higher deductibles and out-of-pocket expenses, potentially putting your family at risk financially. On the other end of the spectrum, Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) coverage have lower deductibles and out-of-pocket maximums. These options are generally more expensive, and you should be careful to maximize your benefit by making smart choices about your care.
Beyond maximizing your current benefit, it’s important to plan for medical expenses in retirement. Based on a 2018 Fidelity study, a couple retiring at 65 can expect to incur $280,000 in medical expenses, not including the cost of long-term care. Planning for and having resources available in your financial plan to cover these costs can protect you from having medical costs impact your retirement lifestyle.
Just a 15-minute call is all it takes to get answers to any initial questions you might have and get you set up with a free consultation with a Merriman Wealth Advisor.
Meet Scott, Associate Advisor
Scott helps our advisory team with the financial planning process by connecting new clients with the Wealth Advisor best equipped to provide advice for their individual situation. He enjoys helping people find solutions to their difficult problems and guiding them on the path toward achieving their goals.
When not at work, Scott enjoys all the Pacific Northwest has to offer. He enjoys baseball, reading, and most importantly, spending time with his wife, Rae, and their three young children.
Can’t find a time that works? Send us a message and we’ll work it out.
I was recently reminded of a troubling statistic: Two-thirds of women do not trust their advisors. This is troubling, largely because it’s so preventable. Check out these tips all women should be aware of to improve this relationship and strengthen their financial futures.
One of the provisions of the CARES Act was a suspension of 2020 Required Minimum Distributions (RMDs). For individuals who took a distribution early in 2020, they were given the opportunity to “undo” part or all of that distribution by returning funds to their IRA by August 31, 2020. Learn more about the tax reporting.
Starting Monday, January 11 through Friday, January 29, eligible City of Tacoma employees have an opportunity to buy affordable additional long-term disability insurance coverage through the City. While this benefit may not sound too exciting, it represents essential insurance coverage that you should consider.
I was recently reminded of a troubling statistic: Two-thirds of women do not trust their advisors. This is troubling, largely because it’s so preventable. Check out these tips all women should be aware of to improve this relationship and strengthen their financial futures.
I was recently reminded of a troubling statistic: Two-thirds of women do not trust their advisors. This is troubling, largely because it’s so preventable. Check out these tips all women should be aware of to improve this relationship and strengthen their financial futures.
One of the provisions of the CARES Act was a suspension of 2020 Required Minimum Distributions (RMDs). For individuals who took a distribution early in 2020, they were given the opportunity to “undo” part or all of that distribution by returning funds to their IRA by August 31, 2020. Learn more about the tax reporting.
Do you have a federal or local government pension? Don’t let the WEP or GPO surprise you. Not only do many people find these rules confusing, but they are also often completely overlooked, which may result in a big surprise when filing for Social Security benefits.
On June 23, 2020 the IRS announced additional relief relating to Required Minimum Distributions (RMD), allowing you to return RMD funds withdrawn after January 1, 2020. Learn more about this announcement.
Many people may be considering the Boeing Voluntary Layoff (VLO) offer but are unclear what retiring now would mean for their future lifestyle. This is a major decision to make in a short amount of time, and there are many factors to consider.
Getting the most out of your HSA can be difficult, especially while trying to do so over a long period of time. Here are some tips to integrate HSA planning into your overall financial goals and retirement plan.
While no one knows when the next recession will occur, you need to learn what not to do so that you can make yourself financially stable. Here are some suggestions to make sure you’re prepared for anything!
I was recently reminded of a troubling statistic: Two-thirds of women do not trust their advisors. This is troubling, largely because it’s so preventable. Check out these tips all women should be aware of to improve this relationship and strengthen their financial futures.
I was recently reminded of a troubling statistic: Two-thirds of women do not trust their advisors. This is troubling, largely because it’s so preventable. Check out these tips all women should be aware of to improve this relationship and strengthen their financial futures.
You may have heard that you can move back into your rental for two years to avoid paying capital gains taxes when you sell. It’s a common misconception – find out what the rules really say.
While many people think the path to financial success is through home ownership that isn’t necessarily the case. Read the article to learn more about why renting vs buying isn’t always a clear-cut decision, to help you determine what’s best for you.
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Have you ever returned home to find that your house was broken into? This article shares a first-hand experience about steps to take if you discover a break-in and ways to improve your home security and insurance coverage.
Starting Monday, January 11 through Friday, January 29, eligible City of Tacoma employees have an opportunity to buy affordable additional long-term disability insurance coverage through the City. While this benefit may not sound too exciting, it represents essential insurance coverage that you should consider.
What could be the cost of ignorance? For some mistakes it could be a couple of dollars; for others, it could run into hundreds or thousands of dollars every year. Not paying attention to your enrollment benefits falls under the latter.
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Term life insurance is used primarily for pure income replacement (i.e., your human capital). When you apply for term life (non-permanent) insurance, you have to choose the amount of coverage you want ($50,000 to more than $2,000,000) and the term of the policy –...
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I was recently reminded of a troubling statistic: Two-thirds of women do not trust their advisors. This is troubling, largely because it’s so preventable. Check out these tips all women should be aware of to improve this relationship and strengthen their financial futures.
With coronavirus cases rising, unemployment at historic levels, and ongoing protests across America, the strong market rebound feels like it could be driven by irrational hope, leaving many with lots of questions. Check out these insights from our Chief Investment Officer, Kristi de Grys.
With the spring season knocking on the door, are you making plans to enjoy the Pacific Northwest? Consider the value of leasing vs buying to stretch your hard-earned dollars. Read this article to learn more about where to start when facing a lease or buy decision.
Determining the right amount of risk to take in your portfolio can be tricky. Once you do figure out how much risk is necessary, do you have a plan to stick with it? Learn more about what you should consider when calculating your risk tolerance.
When you’re in the market for a new job, it’s easy to get caught up in the numbers. But Merriman advisor Aimee Butler’s journey helps illuminate other factors you might consider as you search for a new opportunity.
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End of life matters aren’t something we generally want to discuss, but doing so can greatly ease the stress of your loved ones during a difficult time. Use this checklist to state your intentions!
While no one knows when the next recession will occur, you need to learn what not to do so that you can make yourself financially stable. Here are some suggestions to make sure you’re prepared for anything!
Deciding how to best prioritize your savings can seem overwhelming, and the decisions you make can lead to very different long-term outcomes. It’s especially difficult to know where to start with all of the different account types and savings vehicles available to...
I recently had the pleasure of sitting down with a client’s daughter. She’s in her twenties, just finished up her nursing degree six months ago and is working the night shift at a local hospital. She is living with a couple of roommates and is finally in a position to...
Starting Monday, January 11 through Friday, January 29, eligible City of Tacoma employees have an opportunity to buy affordable additional long-term disability insurance coverage through the City. While this benefit may not sound too exciting, it represents essential insurance coverage that you should consider.
You may have heard that you can move back into your rental for two years to avoid paying capital gains taxes when you sell. It’s a common misconception – find out what the rules really say.
Why is it that when the words “children” and “finances” are mentioned in the same sentence, parents brace themselves like they are about to hear the punchline to a really bad joke? Well, it may be because children and finances are often characterized as two major topics that can cause stress and frustration. Here are some activities that can be done together that can be fun and satisfying for the whole family.
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What could be the cost of ignorance? For some mistakes it could be a couple of dollars; for others, it could run into hundreds or thousands of dollars every year. Not paying attention to your enrollment benefits falls under the latter.
Like most people, you’ve probably switched jobs at some point in your career. If you’ve done this a few times, you may have several outstanding retirement plans, like a 401(k), 403(b), etc. In the flurry of paperwork between leaving your former employer and starting a...
Whenever you leave a job, whether it’s your choice or not, there are many details and changes competing for your attention, and it’s easy to overlook the disposition of your employer-sponsored retirement plan such as a 401(k), 403(b) or 457. You don’t actually have to...
Getting the most out of your HSA can be difficult, especially while trying to do so over a long period of time. Here are some tips to integrate HSA planning into your overall financial goals and retirement plan.
You may have heard that you can move back into your rental for two years to avoid paying capital gains taxes when you sell. It’s a common misconception – find out what the rules really say.
Taking control of your physical and mental health can help reduce your healthcare costs over the long-term, allowing you to use your retirement savings on other things you value.
What could be the cost of ignorance? For some mistakes it could be a couple of dollars; for others, it could run into hundreds or thousands of dollars every year. Not paying attention to your enrollment benefits falls under the latter.
It’s no secret that Medicare can be confusing. Open enrollment is now through December 7th – find out how you could save thousands with this quick flowchart guide!
While many people think the path to financial success is through home ownership that isn’t necessarily the case. Read the article to learn more about why renting vs buying isn’t always a clear-cut decision, to help you determine what’s best for you.
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An important part of helping clients achieve their financial goals is helping them navigate questions and decisions around Social Security and Medicare. Whether it’s deciding when to start Social Security or applying for supplemental Medicare coverage, these decisions have a big impact on your financial situation and wellbeing. This book covers the ins and outs of these complex topics.