Don’t be thinking about your bucket list until you’ve completed your life event checklist. There are so many life events common to most people that effect income needs, such as the birth of a new child or grandchild and their subsequent education. At the opposite end of the spectrum, preparing for the death of a breadwinner or family member can have a dramatic monetary effect on income needs and estate planning. Future inheritance should be part of the planning process as well, including how the money should be used. A change in marital status can have a huge financial impact whether you’re going from being single to married or experiencing a divorce. When most people receive a raise they haven’t considered what to do with the extra money, or when securing a new job how the income will be distributed to meet their budgetary obligations and savings.
Protecting assets and human capital resides in the purview of insurance coverage that should include life, health, disability income, and auto, home and personal property insurance (including specific assets like jewelry, musical equipment and recreational vehicles). The sale of your home or other assets may have tax consequences to be considered, so it’s important to look at the net proceeds of any asset. The purchase of a home or investment needs to be suitable based on your budget and your risk tolerance. Major gains or losses need to be measured for their economic impact on the overall portfolio and the financial goals.
Retirement planning is a career long savings event for the time when you are a senior and need to generate income to maintain your lifestyle and cover your medical needs as well as eldercare costs. You may become a caregiver for your parents -that needs to be incorporated into your retirement plan. If you own your own business, you need to consider succession planning, especially if the business is a major portion of your overall estate. You may even have a benevolent bent towards creating a legacy for your family, close friends or favorite charitable organization.
The life event checklist is important for those starting out in life. It is incredible to consider that, for the most part, the baby boomer generation has not utilized a budget or a life event checklist.