Page 37 - Flathead Beacon // 4.27.16

FINANCIAL CORNER JESSE RIGLER FINANCIAL MOVES FOR A
GROWING FAMILY
WHEN YOU ADD A CHILD TO your family, either through birth or adoption, it’s obvi- ously an exciting and joyful time in your life — and it’s also a busy one, as you deal with all the challenges and commitments faced by all parents. However, hectic as your life may be, you’ll still need to think about making some key nancial arrangements to accommodate your new child.
Here are some suggestions to consider: • Get a Social Security number. You’ll want to obtain a Social Security card
for your child as soon as possible.
• Speak with a tax advisor. If you’re adopting a child, you might be eligible
for federal income tax credits.
• Build an emergency fund. Obviously, a new child may mean a variety of new expenses. If you aren’t prepared for these costs, many of which may crop up suddenly, you might be forced to dip into your long-term investments. Such a move could slow your progress toward your important goals, such as a comfortable retirement. To avoid this potential problem, try to build an emergency fund containing six months’ worth of living expenses. Put the money in a liquid account so you can access it
quickly and without penalty.
• Research options for a special-needs child. If you have a special-needs child, you may want to explore any avail- able government bene ts and consider speaking with an attorney about your
legal options.
• Consider disability insurance. You may
want to purchase disability insurance, or review your current policy, to ensure your family’s needs are covered should
you become ill or disabled and cannot
work for a while.
• Review your life insurance. It’s essen-
tial that you maintain adequate life insurance to cover your family’s future nancial needs, including education costs. While your employer may o er you a group policy, it might not be su - cient to keep up with your growing fam- ily. There’s no one “formula” for deter- mining the appropriate amount of life insurance, but a professional nancial advisor can review your family situa- tion and recommend suitable coverage.
• Save for college. Given the high costs of higher education, it’s never too soon to start putting away money for college. You may want to consider a tax-advan- taged account, such as a 529 plan, which o ers high contribution limits and pro- vides you with the exibility to switch bene ciaries, if necessary.
• Review/add bene ciary designations. You may want to change or add bene- ciaries to your IRA, 401(k), life insur- ance, annuities and other accounts.
• Explore a custodial account. You might want to consider a custodial account, such as an UGMA or UTMA, that allows you to transfer assets for the bene t of a child under 21. (Consult with your tax and legal advisors before making this move.)
Of course, you don’t have to take care of all these items at once. But by methodically working your way through this list, you will eventually adjust your overall nancial strategy to include your new child — which means you’ll be help- ing your growing family make progress toward its important goals.
Jesse Rigler is a nancial advisor at Edward Jones in Kalispell.
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