Phone a Friend is Not Always the Best Plan

Phone a Friend is Not Always the Best Plan


Last week my daughter called to ask about the best way to cook a salmon fillet. My mom called for help setting up a new app on her computer. And I called a friend to ask her advice on how to use ChatGPT in my writing. Isn’t it great to have someone to call when you need an answer? Someone who’ll explain things in a way you can really understand.


I usually search online whenever I need to know something. But sometimes the explanation I get isn’t enough. Often it’s easy to get lost in too much information, trying to figure out what’s relevant and what’s not. And sometimes I’m not even sure what questions I should be asking.


Money is one of those topics where it’s easy to get buried in advice, but hard to make sense of it for your life. You want your money to work hard so you don’t have to worry about the future. When you have questions about money, though, you may not want to phone a friend. First of all, they may be just as informed as you are. And it’s not always comfortable discussing your debt and income over brunch. Recent changes in the law and the economy have also made it difficult for regular people to keep up with the things that could impact our financial plans. 


Keeping track of big changes


I heard something recently about legislation that changes the rules for retirement plans. I’ve got retirement plans. I wanted to know if those changes apply to me. It turns out they do, and they’ll impact my daughter, too, since she has a college savings plan and inherited IRAs. But like any legislation, the rules are rather complicated. It’s just the kind of puzzle a financial planner might enjoy working on – and I’m happy to let them do it.


The new legislation is called the SECURE Acts 1.0 and 2.0, and you can read them yourself if you’re so inclined. But you still might end up asking the question: What does this mean for me? Your Arrivity financial planner has been studying the new rules and they’ll be able to tell you how they might impact your financial scenarios. Here’s an overview of some of the major changes:


  • Required minimum distributions (RMDs): If you’re not yet retired, the age is changing for when RMDs will need to be taken. You’ll want to know how this factors into your plans and the expected taxes in retirement.


  • Inherited IRAs: It used to be that RMDs for IRAs inherited from a non-spouse could be stretched over a lifetime. The new rules require a beneficiary to get the money out of those inherited IRAs within ten years. You’ll want to make a plan for how you’re going to do this so you can minimize taxes and avoid penalties.


  • 529 college savings plans: You can now transfer up to $35,000 from a 529 plan to fund a Roth IRA. Be sure to talk to your financial planner about the annual contribution limits and how this new opportunity fits into your overall plan.


These are just a few of the changes Arrivity financial planners are talking to clients about these days. A lot can impact your financial plan and you may have questions – or you may not know what to ask. It’s best not to let more than three years go by without having your retirement scenarios updated due to changes in your financial situation along with external factors. When you come in for your review, you can talk about changes in your life, the law, or the economy that might require changes in your financial plan.


Your financial planner also has tools that are always being updated to provide better estimates for things like Medicare premiums, annual cash flow projections, and taxes in retirement. They’re also on top of new types of insurance and investments so they can show you which ones might align with your goals. And they’re looking ahead to future changes, like legislation scheduled to sunset in 2025 that could result in higher tax rates.


There are some things that are fun to DIY, but financial planning (and car repair, surgery, and plumbing) I’d rather leave up to the experts. If you’ve already got a financial plan, you’ve got a good start. Just be sure you’re keeping it tuned up.


Questions to think about:


  • How old is your financial plan? Arrivity recommends meeting with your planner annually and updating your retirement scenario(s) every three years.
  • Have you experienced a change in your life that will impact your financial plan? Events like marriage, a new baby, or a change in income are good reasons to schedule a meeting with your financial planner.
  •  Are you puzzled about something? If you’re worried about how recent changes in the law or the economy will impact you in the coming year, make an appointment with your financial planner.


Action steps:


  • Review your financial planning goals every six months or so and ask yourself how you’re doing.
  • If you don’t have a financial plan, contact Arrivity so you can get matched with a planner.
  • When you meet with your planner, be sure to ask about factors that could be impacting your financial path such as expected returns on investments, tax law changes, inflation, and changing real estate values.

The foregoing content reflects the opinions of Liz Behlke and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.