SAN DIEGO - September 23, 2020 - (Newswire.com)
It was recently reported 9 out of 10 people are experiencing financial stress related to the COVID-19 pandemic. With so many new factors at play, Steve Sexton, financial consultant and CEO of Sexton Advisory Group, is sharing the top retirement planning mistakes to avoid in 2020.
1. You don’t have a finalized estate plan. “The pandemic has forced everyone to face their own mortality,” says Sexton. “Most people know the need for a revocable living trust, will, and power of attorney for health care or financial, but people often do not complete or update these documents.” By neglecting to finalize/update your estate plan, you may be giving the state court system the power to determine whom will receive assets or who will make financial or health decisions if you are not able.
2. You don’t have/stopped contributing to an emergency fund. With no clear knowledge of how long this pandemic will impact our lives, Sexton highlights the importance of a designated emergency fund to cover living expenses throughout this crisis and any others that may arise. He recommends putting aside 3-6 months of living expenses in an easy-to-access account.
3. You forego counsel from a financial professional. Leveraging the specialized experience and knowledge of a financial planning investment advisor ensures you have a cohesive and complete financial plan that leaves no blind spots in your retirement plan. A financial advisor can develop a balance sheet and cash flow statement, review life insurance, review your plan with your CPA and estate planning attorney, help with tax mitigation and regularly discuss your financial situations.
4. You are considering liquidating your retirement accounts. Should it become necessary to liquidate certain accounts in order to pay daily living expenses, Sexton recommends using your retirement account as a last resort. Instead, he suggests starting with accounts with the minimum taxable impact, such as savings accounts, then CDs, and finally, poor performing stocks. “Even though the CARES Act provides three years to pay the taxes or pay back the money borrowed, the money from your 401k is far more taxable than CDs, stocks, etc.” explains Sexton.
5. Not contributing to your 401K or IRA. Contributing through payroll to a 401K, 403B, 457 or IRA will provide a tax deduction on money contributed, as well as the ability to accumulate shares at a discount. According to Sexton, the only good reason to stop regular contributions is if these funds are absolutely necessary to pay monthly bills or accumulate money for an emergency fund.
For more information on Sexton Advisory Group, please visit https://www.sextonadvisorygroup.com/
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Original Source: Sexton Advisory Group Reveals the Biggest Retirement Planning Mistakes to Avoid in 2020