Category: Uncategorized

Authored by Blakely Financial

If you or a loved one are planning to start a family, there are changes coming your way.  Many you have heard about: changing diapers, soothing crying babies, or getting the bottle just the right temperature.  Those are important, but the ones you don’t know about can be even more critical to prepare for before the little one comes.

Budgeting

Creating a budget for the pregnancy, labor and delivery, and first year after birth can be critical.  It is recommended that you build an emergency fund to be prepared for some unexpected expenses.

A budget will keep you from buying too many gadgets that friends/bloggers/ads say you “NEED.”  You will find that you don’t need too many gadgets, although it’s certainly okay to have items that make life easier for mom and baby.  I would also recommend not buying too much of one thing.  Yes, having more bottles is nice, so you don’t have to wash them as often, but you’ll still have to wash ALL of them!  Try starting with one or two of some things just to make sure you like them.  You can always get more very quickly these days if you find you need more.  Sometimes it’s not that you don’t use it, but that you found a different version you like better.  It’s easy to get lost amongst all the options that are available.  I mean how many strollers could you possibly need for one child?!? (That one will make so much sense after a few years for some of you.)

Ok, more on the strollers…

You have an everyday stroller, but it’s not great for jogging/soft soil, so you may be tempted to buy a jogging or all-terrain stroller.  Also, wouldn’t it be great to have an umbrella stroller for those quick trips or for airports?  That’s three! Just wait until you have a second child and you want a double stroller or find a brand that you didn’t know about with some cool new feature.  It can add up quickly!

Back to general budgeting…

Make sure you don’t buy too many newborn-sized clothes or diapers.  Your baby will grow out of that size fairly quick.  For diapers, I would buy some newborn size, mostly size 1 and maybe a box of size 2’s.  Don’t go overboard and buy past size 2.  It will be a long time before baby needs to move past those, and many children will stop at Size 4, go through potty training and never need anything bigger.

On the baby clothing, you may feel pressure to buy your kids designer brand clothing or special outfits, but that can get out of hand quickly.  Try to stick to off-brand clothing most of the time, especially when they are young because they will literally wear it once in some cases.

Employer Benefits / Health Insurance

If you have health insurance coverage, it’s important to learn your deductibles and max out-of-pocket costs.  Some plans will cover some local hospitals, but other hospitals are out-of-network or carry a higher deductible.  When choosing your doctor, make sure he or she delivers at an in-network hospital.  You will need to choose a pediatrician that is in-network as well.

If employed, does your employer offer paid maternity leave?  You are entitled to 12 weeks of leave under FMLA (Family and Medical Leave Act), but your employer may provide some weeks of paid leave.  You can use PTO or vacation/sick leave to cover weeks of paid leave.  Keep in mind that if you have a health plan through the mother’s employer, you will need to cover your portion of the healthcare costs during leave that normally come out of your paycheck.  Often times, you can spread out your PTO/vacation days, so you won’t have to come out-of-pocket for those premiums.  If you still have unpaid weeks at the end, you’ll need to decide if you can afford to take the full 12 weeks, which would result in an income gap.

Your employer may provide short term disability, or it may be optional to elect through payroll.  This typically provides some coverage for income replacement due to pregnancy, but each policy is different.  If you have a short term disability policy, please consult with your benefits manager or financial advisor.

Also, some employers offer a FSA for Childcare (Flexible spending account) sometimes called a Dependent Care FSA.  If you have a FSA, you have to choose between it and the Dependent Care Tax Credit.  Consult your tax advisor to help make the right decision for you.  This is different from a standard FSA, so if you have questions please consult with your benefits manager for more information.

Childcare

Childcare is something you should discuss well in advance of needing it.  Several questions will need to be addressed. Will mom work after maternity leave?  If so, will you use daycare or have family to help out?  If family is willing and able to help, spend some time discussing a schedule with them. They will be giving a significant portion of their time, and they may not realize what they are committing to.  Even if they’re committed to the time aspect, what happens when they need to go to a doctor’s appointment or get their car serviced?  Mom might not have any PTO left if she used it all up during maternity leave. If family cannot assist full-time, is there a part-time daycare that you could use to give them a break?  If any kind of daycare is in the plans, you might need to get on a waitlist for a spot for your child.

529’s / UTMA’s / Savings

One way to help prevent wasted spending on gadgets AND plan for future expenses, is to take the money that you receive in lieu of gifts at the baby shower and fund a 529 or a UTMA for your child for college savings.  We are going to elaborate on this topic in more depth on National 529 Day on May 29^th, so be on the lookout for a blog on this topic soon.

Estate Planning

A wise step to take before baby arrives is to create or review your estate plan and beneficiaries of life insurance or existing retirement plans.  Estate plans can be drafted to include all children you have/will have so having a name, birth date, or social is not required in most cases.  You can also adjust in the future, but it is best to go ahead and put a plan in place as you will have little free time after your baby is here to meet with an attorney.  As part of that review, you’ll want to consult with your financial advisor to see if you have an appropriate amount of life insurance.

Birthing Class & Hospital Tour

And finally, as you enter the third trimester, I highly recommend going to the hospital where you plan to deliver and signing up for a class for new parents.  This will cover a lot more than breathing techniques like your parents likely experienced.  You will cover a wide variety of topics so when you hear phrases like, “my water broke,” or “you’re 10 centimeters dilated,” or “do you want an epidural?” You’ll know what to do! Plus, these usually include a tour of the hospital, so you know where to go when it is time.  You will also be more comfortable knowing what to expect.  Most hospitals give you the opportunity to pre-fill the birth certificate and social security application, so you don’t have to do it in the hospital after birth.  That means you have to CHOOSE A NAME! (Something my wife and I seem to always do at the last possible second!)

These are just a few things to think about when planning a family.  As you think about these topics it is always recommended to consult with your tax, legal or financial advisor where appropriate to make sure you are making the right decision for your specific situation.

Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM to see what other expert advice we can provide towards your financial well-being.

BLAKELY FINANCIAL, INC. located at 1022 Hutton Ln., Suite 109, High Point, NC 27262 and can be reached at (336) 885-2530.

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals.

Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser.

Presented by ROBERT BLAKELY, CFP®, AIF®, CHFC®

Caring for aging parents can be a difficult planning aspect to balance. If you are among the “sandwich generation,” you may be trying to support your aging parents as well as your own children. Today, individuals are living longer than before, so it is better to be prepared.

Having the Conversation

The first step—and often the most challenging one—is to find out what your parent needs or expects from you. It’s always best to have this conversation before a crisis occurs. Also, keep in mind that your parent may resist discussing the topic at first. He or she has lived a long time without much assistance from you, and the transition to accepting your new role in his or her life may be bumpy. Understanding and respecting your parent’s wishes will go a long way toward smoothing the process. How will your parent deal with incapacity, the fear of becoming dependent, or the reluctance to burden you with his or her needs?

Gathering Information and Documents

Create a list of emergency contact numbers, including your parent’s medical providers; religious leader; neighbors; friends; and financial, tax, and legal advisors. You should also gather copies of legal documents, funeral plans, medical records, and medication information. Keep a list of investment, bank, and insurance accounts, in addition to the locations of safe deposit boxes, real estate deeds, and automobile titles. You may find it helpful to upload all of this information to a USB flash drive so that it’s readily available when you need it.

Evaluating Your Parent’s Situation

It may be difficult for you to evaluate your parent’s mental and physical capabilities or to locate community services to support his or her independence. If that’s the case, a geriatric care manager can be indispensable, particularly if you live some distance from your parent. This person can perform an in-home assessment, determine your parent’s housing needs, and recommend a plan of action. Your parent’s doctor should be able to refer you to a qualified geriatric care manager.

Can your parent remain at home? Just because your parent can no longer care for his or her home doesn’t mean that he or she has to move. In fact, staying in one’s home may offer better support and social networks than moving in with one’s children. If your parent can stay safely alone, you may want to divide up the household chores among family members or hire someone to provide housekeeping, cooking, and personal care. Here are a few other items to consider:

• Find out if Meals on Wheels is available in your area. The organization’s volunteers deliver meals to seniors who can no longer cook for themselves.
• Look into modifying your parent’s home to help with any physical limitations.
• Install a security system to summon emergency personnel if necessary.
• Call the local police department to find out if it offers a program to check on elderly residents. If not, churches often have a volunteer group dedicated to checking in on older parishioners.
• Post important telephone numbers for contacting you, emergency services, and your parent’s doctor in a prominent location.

As your parent grows older, an assisted living facility or retirement community may be a better solution than living at home. Such residences provide additional benefits, such as transportation, access to medical personnel, and a richer social life.

Can your parent move in with family? Another solution is moving mom or dad into your home. This is a big decision, and it may not be the best choice for every family. Ask yourself:

• Will living together put stress on your relationship with your parent or on your relationship with your family?
• Can you afford to remodel your home to provide a comfortable and private environment for your parent?
• Do you have the flexibility to provide transportation as needed?
• Will other family members step in to help, both financially and physically?
• Will other family members share the cost of adult day care?

Can your parent continue to drive? If your parent is older than age 75, takes medications, or both, his or her ability to drive a car may be impaired. Of course, it’s difficult to know when older drivers have become a danger to themselves or others. Give your parent’s friends and neighbors your contact information and ask them to make you aware of any changes in his or her driving skills. Or suggest that your parent accompany you for grocery shopping and other errands rather than driving alone. Many communities offer driver’s education courses that teach best practices for seniors (e.g., limiting drive time to daylight hours and good weather conditions, avoiding highway or high-traffic situations).

Keep in mind that this may be a very sensitive topic for your parent. Many seniors view driving as essential to their independence and will resist giving up the car keys. For help approaching the conversation, visit the NIH National Institute on Aging website on older drivers at www.nia.nih.gov/health/older-drivers.

Financial and Legal Issues

As we age, we lose mental alertness. Due dates for bills pass, insurance policies lapse, and poor financial decisions may be made. Your elderly parent will likely need your assistance with his or her financial, legal, and medical matters.

Banking. Most banks offer automatic bill-payment services from checking or savings accounts—a convenient option if your parent is internet savvy. Or your parent can give you responsibility for his or her finances by having bills and financial statements sent to your address. You might also consider a bill-pay service, which receives a copy of invoices and then requests your parent’s bank or financial institution to send checks directly to payees.

Investments and insurance. If day-to-day management of your parent’s finances is too much for you to handle, talk to your financial advisor. He or she can recommend products that provide income on a regular basis, such as managed retirement income portfolios, annuities, or bonds. Your financial advisor can also propose cash-management solutions that allow your parent’s monthly social security, retirement plan, and annuity payments to be deposited automatically into an account. You can typically access these funds through a debit card, unlimited checkwriting capabilities, and online bill-pay services—everything that a bank checking account offers.

Also, review your parent’s existing life and long-term care insurance coverage and make changes if necessary.

Legal concerns. An elder law attorney can help you prepare documents to manage your parent’s health care and financial affairs. In fact, many states provide free legal services to the elderly. Your parent may wish to seek an attorney’s help in the following areas:

• Appointing a health care representative. Without legal authorization from your parent, medical privacy laws prevent doctors from discussing the patient’s medical conditions with you. In addition to appointing a health care power of attorney, your parent may want to consider a living will, which provides instructions on how to manage treatment if he or she has a terminal or irreversible condition and cannot communicate.
• Understanding the process for qualifying for government programs such as Medicaid or veterans’ benefits. Don’t rely on the experiences of family or friends, as their situations may differ from your parent’s.
• Reviewing and updating estate planning documents, including his or her will, durable power of attorney, and any revocable trusts. In addition to the basic estate planning documents, your parent may wish to draft a letter outlining who will receive personal effects such as jewelry and family heirlooms.

What About Taking Care of Yourself?

Although caring for an elderly parent can feel overwhelming at times, you are not alone. Many local and national groups are available to support you in providing the care and services your parent will need. To get started, visit the U.S. Administration on Aging’s Eldercare Locator at  https://eldercare.acl.gov/Public/Index.aspx or call 800.677.1116.

At your workplace, talk with a member of the human resources staff to find out if you’re eligible for unpaid leave under the Family and Medical Leave Act. Also, ask about the availability of an employee assistance program (EAP). EAPs are intended to help employees deal with personal problems—including concerns about aging parents—that might adversely impact their work performance, health, and well-being.

Finally, seek the help of a financial planner. In addition to reviewing whether your parent’s resources are sufficient to pay for care, he or she can help you determine how to balance your own goals with your parent’s needs.

Additional Online Resources

For further information on caring for an aging parent, you may find these resources helpful:

• ElderLawAnswers: elderlawanswers.com
• National Association for Home Care & Hospice: nahc.org
• My Medicare Matters from the National Council on Aging: mymedicarematters.org
• State Health Insurance Assistance Programs: wwshiptacenter.org

Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM to see what other financial tips we can provide towards your financial well-being.

ROBERT BLAKELY, CFP® is a financial advisor with BLAKELY FINANCIAL, INC. located at 1022 Hutton Ln., Suite 109, High Point, NC 27262. He is the founder and president of Blakely Financial, Inc. celebrating 25 years in business.

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals.

Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser.

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.

Prepared by Commonwealth Financial Network

Presented by EMILY PROMISE AIF®, APMA®, CRPC®

A 401(k) plan is a company-sponsored retirement plan that eligible employees can contribute a portion of their salary into a variety of investment options. In some instances, employers may also offer to make matching contributions. 401(k) plans are an easy way to save for the future through payroll contributions.

If your company offers a 401(k) plan and you are not participating, you may want to revisit your decision as they are a great opportunity to save for retirement. Beginning early and consistently contributing to a 401(k) plan throughout your working years can assist you in reaching your financial goals for retirement.

If you have just entered the workforce, retirement may be the farthest thing from your mind. Or if you are an older employee nearing retirement, you might be thinking it is too late. For both life stages, 401(k)s can offer specific advantages that make them a great option for investing and saving.

401(k) contributions are typically ‘before tax’ money. The amount you choose to contribute is deducted from your paycheck before taxes are taken out.  This means you are paying taxes on a smaller portion of your salary.  There are limits each year on just how much you can put in your 401(k).   In 2020, the maximum amount one can contribute is $19,500. If you are 50 or older, you can make a catch-up contribution of $6,500 in addition to the $19,500 for a total of $26,000.

Many plans also offer options for employees to make post-tax ROTH 401(k) contributions from their paychecks. Post-tax ROTH contributions do not lower an employee’s taxable income, but they do grow tax free and aren’t taxed upon withdrawal.

Many employers offer matching contributions. For example, your employer may offer a 4 percent match. This means they will contribute the same amount that you do, up to 4 percent. Of course, you can personally contribute more, but the company will match only 4 percent.  If you are not contributing to your company’s 401(k) plan and they have a match, you are leaving money on the table! Make sure to begin contributing at least to the amount of the match as soon as you can.

An additional benefit of a 401(k) plan is that when you finally pay the taxes on your 401(k) contributions, you may be at a lower rate. Typically, you begin withdrawing money from your 401(k) when you retire and you may very well be in a lower tax bracket at that time; thus you could end up paying less tax on your savings when you do eventually withdraw funds.

A few key points to remember about a 401(k); It is a retirement savings plan, so once you put money in, it is always best to leave it in. There are penalties if you take the money out before retirement age. Also keep in mind that if you change employers, you can roll your vested balance into your new employer’s 401(k) plan or into another qualifying retirement account such as an IRA.

If you have questions, it is always a great idea to call your financial advisor for guidance. But no matter what, please take advantage of any type of savings plan your current employer offers as the earlier and more aggressive you are, the closer you will come to achieving your financial goals.

Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM to see what other expert advice we can provide towards your financial well-being.

EMILY PROMISE is a financial advisor with BLAKELY FINANCIAL, INC. located at 1022 Hutton Ln., Suite 109, High Point, NC 27262 and can be reached at (336) 885-2530.

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals.

Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser

Presented by ROBERT BLAKELY, CFP®, AIF®, CHFC®

Estate planning is for everyone regardless of your financial circumstances. Through an estate plan, you have a say how, when and to whom your assets are transferred, in addition to achieving your own specific tax and non-tax planning goals.

Organizing your financial affairs and planning ahead to help alleviate stress for your loved ones is an important financial planning objective. And a well-thought-out estate plan can help manage and preserve your assets during life as well as protect your loved ones by conserving and directing the distribution of assets at death. While this topic is never a pleasant one, it is imperative to any financial planning process that you might embark upon to protect you and your loved ones.

Essential Estate Planning Documents

These are some of the estate planning documents that you need regardless of your age, health or wealth.

• Durable power of attorney
• Advance Medical Directives
• Will
• Trust Agreement (dependent upon your specific situation)

Durable Power of Attorney –A durable power of attorney (DPOA) can help protect your property in the event you become physically unable or mentally incompetent to handle financial matters. If no one is ready to look after your financial affairs when you cannot, your property may be wasted, abused, or lost.

A DPOA allows you to authorize someone else to act on your behalf, so he or she can do things like pay everyday expenses, collect benefits, watch over your investments, and file taxes.

Advance Medical Directives – With a Healthcare Power of Attorney (HCPOA), you authorize an agent to handle your healthcare needs in a manner consistent with your intentions in the event of your incapacity. This includes permission for the agent to authorize actions regarding the continuation of life support, nutrition, and hydration, as well as to deal with general health care decisions that may arise.

Some states authorize a secondary health care document, typically called a living will. It works in conjunction with a Healthcare POA, authorizing your healthcare providers to take specific action in the event that there is no reasonable hope of your recovery. It also serves an important function when the agent or other individuals you named in your health care POA are unable to make a decision on your behalf relative to continuing life-sustaining treatment.

Will – A will is often said to be the cornerstone of any estate plan. The main purpose of a will is to disburse property to heirs after your death. If you do not leave a will, disbursements will be made according to state law, which might not be what you would want. When writing your will, you can name the person (executor) who will manage and settle your estate and you can name a legal guardian for minor children or dependents with special needs. If you do not appoint a guardian, the state will appoint one for you and that probably will not be within your wishes. It is crucial that your will is well-written, articulated and properly executed under your state’s laws. You must also remember to keep your will up-to-date and make changes when you experience large life events.

Trust – With a trust, you can plan for the management of assets during your life, if you become incapacitated, and upon your death. A trust can also help minimize potential federal or state estate taxes. Trusts come in two general forms: testamentary trusts, which are funded at death, and living trusts, which are funded during your lifetime. Generally revocable, a living trust is the centerpiece of a well-rounded estate plan. When a living trust is established, the process of distributing assets at the time of death will not be subject to the jurisdiction and oversight of the probate court.

Estate Planning Benefits

Spending time now to properly plan for the future includes the following benefits:

• Provides financial security for your family
• Ensures that your property will be preserved and passed on to beneficiaries
• Mitigates or avoids disputes among family members
• Minimizes estate taxes and other administrative costs
• Ensures competent management of your property in the case of incapacity
• Enables you to provide for a favorite charity

Other Considerations

A will governs only probate property; a trust governs only assets owned by the trust. In addition, some assets pass outside of probate by virtue of a beneficiary designation or the manner in which title is held. Therefore, it is important for you and your financial advisor and estate planning attorney to review the ownership and/or beneficiary designation of these assets to be sure that they will be distributed according to your wishes upon death. These assets include:

• Jointly held property
• Life insurance proceeds
• Retirement benefits
• Employee death benefits
• Retirement plan proceeds

The team at Blakely Financial is here to work with you and your estate attorney to create an estate plan that suits your needs and that helps you to achieve your financial and personal goals. If you are not a client of our firm, we encourage you to contact your financial advisor to seek guidance with your estate planning goals or contact one of our team members who would be happy to help.

Prepared by Commonwealth Financial Network

Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM to see what other expert advice we can provide towards your financial well-being.

ROBERT BLAKELY, CFP® is a financial advisor with BLAKELY FINANCIAL, INC. located at 1022 Hutton Ln., Suite 109, High Point, NC 27262. He is the founder and president of Blakely Financial, Inc. celebrating 25 years in business.

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals.

Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser.

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.

Presented by STEPHEN LAFRANCE, CFP®, MBA

As you work and plan for your financial future, a possible strategy for savings is a Roth IRA. A Roth IRA is a retirement savings account that allows your money to grow tax-free. You fund a Roth with after-tax dollars, meaning you have already paid taxes on the money you put into it. In return for the no up-front tax break, your money grows tax-free, and when you do withdraw it for retirement, you pay no taxes. Roth IRAs are best when you think your taxes will be higher in retirement than they are right now.

The first requirement is that you must have taxable compensation. If your taxable compensation is at least $6,000 in 2020 (unchanged from 2019), you may be able to contribute the total amount. But it gets more complicated. Your ability to contribute to a Roth IRA in any year depends on your MAGI (Modified Adjusted Gross Income) and your income tax filing status. As a result, your allowable contribution may be less than the maximum possible or nothing at all.

Your contributions to a Roth IRA are not tax-deductible. As a result, you can invest only after-tax dollars in a Roth IRA. The good news is that if you meet certain conditions, your withdrawals from a Roth IRA will be completely free from federal income tax, including both contributions and investment earnings. To be eligible for these qualifying distributions, you must meet a five-year holding period requirement. In addition, one of the following must apply:

• You have reached age 59½ by the time of the withdrawal
• The withdrawal is made because of a disability
• The withdrawal is made to pay first-time homebuyer expenses ($10,000 lifetime limit from all IRAs)
• Your beneficiary or estate makes the withdrawal after your death.

Qualified distributions will also avoid the 10% early withdrawal penalty. This ability to withdraw your funds with no taxes or penalty is a key strength of the Roth IRA. And remember, even nonqualified distributions will be taxed (and possibly penalized) only on the investment earnings portion of the distribution, and then only to the extent that your distribution exceeds the total amount of all contributions you have made.

In addition, it does not matter if you are covered by an employer’s retirement plan, such as a 403(b) or 401(k). If you do not exceed the IRS income limits, you can still contribute the maximum annual amount to a Roth IRA, $6,000, or if you are age 50 or older, $7,000.

Another advantage of the Roth IRA is that there are no required distributions after age 70½ or during your life. As a result, you can put off taking distributions until you need the income. Or, you can leave the entire balance to your beneficiary without ever taking a single distribution, and their withdrawals will be tax-free.

As always the case with planning for retirement, we suggest meeting with your trusted financial advisor and your tax preparer to ensure that you are getting all the benefits available from each savings vehicle.

Prepared by Broadridge Advisor Solutions

Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM to see what other financial tips we can provide towards your financial well-being.

STEPHEN LAFRANCE, CFP®,MBA is a financial advisor with BLAKELY FINANCIAL, INC. located at 1022 Hutton Ln., Suite 109, High Point, NC 27262

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals.

Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser.