The financial costs of a life lived are almost incalculable; the struggles, joys, and challenges that come from the signposts of life. Signposts – like marriage, college, having children, or retiring – are both emotionally enriching and monetarily draining. With the finite amount of money that most Americans make each year, tackling these life goals requires careful consideration and planning to maximize their impact. However, just like trying to get into peak physical shape with only a gym membership and new shoes might seem like a Herculean task, so too is trying to navigate the maze of investments and financial planning on the strength of your own intuition and Googling abilities. Instead, it’s important to seek out a financial planning professional to help guide you toward a fuller, more financially secure life.  These professionals pride themselves on being malleable to the needs of their clients, working tirelessly to discover a clean path toward any financial goal with ease. Jennifer Barrett, a financial adviser for Edward Jones, describes her role in a client’s life as being knowledgeable and flexible to a fault; a learned guide into an unknowable future.  “Along the scope of a person’s life journey, things will change. So, what might be most important when they have young children is paying down debt, saving for education, or saving for retirement. But then as you transition to being an empty nester, your concern may become caring for older parents while also providing for yourself.” Barrett said, “I really think you have to take a holistic approach when dealing with somebody’s entire life.”  That approach is further outlined by Renee Pastor of the Pastor Financial Group who describes the four steps one must follow to find financial independence: 

  1. Determining where you are right now. 
  2. Determining where you want to go. 
  3. Developing a plan to get there. 
  4. Monitoring and working your plan. It is with these steps that financial advisers shepherd clients toward a life of financial fulfillment.

CHILDREN & EDUCATION

There is no financial commitment which has a more lasting impact on a person’s life than having and raising a child. According to Alyssa Klein, a Senior Registered Client Service Associate with Raymond James & Associates, the initial step to securing your child’s financial future is first securing your own.  “If a client comes up and says, ‘We are thinking about having kids,’ the first thing we are going to say is ‘do you have an emergency fund?’” Klein said. Renee Pastor, seconds this notion.  “Most people in this country are one paycheck away from bankruptcy. Your first layer of protecting yourself is having 3-6 months of living expenses tucked away,” she said.  After making sure you are insulated from any unforeseen debts, the next step is maximizing your retirement plan. Even then, Klein does not recommend saving for children until the children themselves are around.  “Don’t start saving for children until you have children,” Pastor said. “You really should be saving for yourself.”  When the child is born, however, unforeseen costs begin to pile up, predominantly education.  “We typically say once you have the social security number for your child, start saving,” Klein said, “and I recommend a combination of a 529 Plan and a UTMA, which is a custodial account.”  The 529 Account requires a focus on education, but can be utilized for both private primary school as well as college, whereas the UTMA, or Uniform Transferred to Minor Account, is more flexible, with the account transferring into the child’s control at age eighteen. Funds from a UTMA can be utilized for any purpose; buying a house, traveling the word, etc. However, the 529, while solely focused on education, can be transferred to another beneficiary for that same purpose; so, if your oldest child decides to forego college or gets a full ride scholarship and does not need the funds, another child can take on the savings without any loss of benefit.

HOME OWNERSHIP

Purchasing a home is a fraught endeavor for anyone, but for first-time home buyers, making the jump from renting to ownership, the path can feel treacherous and filled with financial commitments. However, some financial advisers specialize in the world of residential real estate and pride themselves on smoothing out the home buying experience. Enter, Drew Remson, President at America’s Mortgage Resource, a 30-year veteran of the greater New Orleans real estate market who cannot overstate the benefits of home ownership.  “Nothing is more important than getting a house under your belt,” he said. “Because you build more wealth from the home than any other way possible with less effort.”  The first step in fulfilling that dream is a pre-approval process to establish what options are available depending on your current debts, income, and credit profile.  “In that process we develop a relationship, and we ask you a series of questions to figure out what your goals are, what money you have available to put into the project, and where your comfort level is,” he said. This process is crucial as it gives the potential home buyer a full scope of the costs coming their way, as well as an estimate of what monthly mortgage payments might look like, creating a realistic path toward a predetermined goal. As opposed to other life events which require significant foresight and savings, purchasing a home is also an investment, an asset which can be spun for higher return in the future.  “The beauty of real estate is that it is a long-term investment and it’s leveraged,” Remson said. “So you might buy a house with 3 to 5 percent down, but you are earning 3 to 4 percent a year on the total value, even though you only put up 3 percent of that value.”  This, coupled with the fact that the geography of the greater New Orleans area leads to a historically consistent real estate market, means that investing in your own future, through purchasing a home, is one of the surest investments you can make. However first-time home buyers should not expect to move into the same size homes that their parents live in at the outset.  “Your parents bought properties and moved up over 30 years. They started with a $70,000 house and they took the appreciation on that house, sold it, and dumped it into a $150,000 house,” Remson said. As with all financial management situations, setting realistic goals with manageable expectations is ideal for maximizing the positive impact on your life. 

STARTING A BUSINESS

Starting a business sounds simple – have an idea, sell that idea and make money off of it. But without sound guidance from a financial planner; your path is fraught with pitfalls and innumerable taxation trepidations. In this sense, Michele Moore Echols and Gregory S. LaCour, attorneys with Metairie law firm Blue Williams, recommend seeking out a strong litigator with experience starting a business in Louisiana.  “There’s very rarely a reason not to do an L.L.C. (Limited Liability Company),” Echols said. “Right now, an LLC can be taxed any way you want them too; as a sole proprietorship, partnership, C Corporation, S Corporation depending where we want to focus.”  The variabilities of business filing are seemingly endless, as are the liabilities if not entered into properly, as LaCour explained.  “First the articles of organization are filed, then a tax I.D. number is received, but it’s always best practice to have an operating agreement as well,” he said.  An “operating agreement” is basically the overriding charter of the company, it delineates ownership percentages, creates a tie breaking mechanism to make decisions, and forms a path to exit the business amicably if need be. While it is technically possible to file online to create your own company or nonprofit, the chances of not including the required language in the bylines are extremely high, meaning consulting with specialized attorneys is overwhelmingly advisable. 

ESTATE PLANNING

The culmination of a life spent saving money, acquiring assets, and running a (hopefully) successful business invariably leads to the most uncomfortable signpost of life to plan for; end of life and what is to be ultimately done with your estate. As with all long-term financial planning, it is never too early to put things in place.  “What people don’t think about is, you want to have powers of attorney in place, medical, financial, and when you have children, the will is going to control who is raising your minor children,”  LaCour said. Even single people without a traditional family should consider having these documents prepared for their own benefit, explained Echols.  “You have to have a HIPAA form so that your power of attorney can access your medical records, because if you don’t then that power is going to default to your parents and you don’t want them fighting over your medical decisions,” Echols said. While at the outset, making plans for one’s eventual demise might seem macabre and unpleasant, in truth setting goals for how one might want this transfer of assets to occur reclaims a sense of autonomy and control over an inevitable reality.  “You want people to have peace. The government is not going to tell you where your property is going to go or what is going to happen. You develop that plan, and most people who are fearful of doing the documents are peaceful after it’s done. They’ve checked this thing off their list,” Echols said. For all the signposts of life, both joyous and tedious, Jennifer Barrett sums up the full breadth of what financial advisers can bring to your life:  “Financial services have really shifted from back in the old days of just selling investments into somebody helping you realize the full picture of what you want to accomplish. It is really about the legacy you want to leave and the life that you want to experience with the people you love,” she said. The information provided in this interview does not, and is not intended to, constitute legal advice; but rather is for general informational purposes only. Readers of this article should contact their attorney to obtain advise with respect to any particular legal matter.

RETIREMENT

While planning for home ownership and children are largely a matter of setting aside money for a certain purchase in the near future, saving for retirement is the source meant to sustain a life of leisure and comfort. And in a life of finite resources meant to sustain a finite life, keeping your focus on your personal future could not be of more importance.  For most people, a company 401K plan allows one to be fairly hands off when it comes to setting aside money for retirement. However, for many younger professionals who are deeply entrenched in a freelance economy, without mechanized function for putting money aside for retirement, there is a fantastic solution: the Roth IRA. The benefits of this type of retirement account are that the money grows completely tax free for the rest of your life, although this opportunity is only available for certain levels of income.  For example, a married couple in 2023, filing jointly, could only take advantage of a Roth IRA if they make less than $228,000 together. Also in 2023, the maximum that a person could put into their account is $6,500. That being said, anyone who is 50 years or older has the opportunity to add an additional $1,000 to their account per year,  known as the “catch up provision.” When it comes to a Roth IRA, the earlier you start, the better off you are, according to financial advisers like Renee Pastor, who can help navigate your way through the system.  “Personally, I want my insurance person to be my insurance person, and I want my banker to be my banker, and I want my investment advisor to be my investment advisor,” Pastor said. 


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