Recently as I drove my daughter to kindergarten, she asked when the trees would start changing colors. In the South, we have a visible reminder of the various seasons as our trees transform over the course of the year, budding in the spring, growing and displaying their leaves in the summer, shedding their foliage in autumn, and resting in the winter. Just as the trees change, so too do our lives as we experience various seasons, each requiring its own responsibilities and, typically, unique financial planning opportunities.
-
Fall
This is a season of harvest, reaping the benefits of things you have sown earlier. Perhaps your children are now grown and entering college or the workforce, or you are making the decision to retire and pursue other interests. During this time, the fruits of your many labors come to fruition as you may utilize 529 plans for education expenses or shift from saving for retirement to spending those savings! This is also another time of careful preparation and planning. Just as farmers seek to ensure their harvest lasts as long as needed, it is important for you through your financial planning to help ensure your savings and investments cover your lifetime.
-
Winter
This is a season of reflection and preparation. As the cold weather arrives, and many turn indoors, the work continues in anticipation of the next season. Although harvest season is past, you will find yourself still relying on the supplies you stored in advance, as well as continuing to monitor those supplies going forward. The days of winter spent indoors provide an opportunity for both taking inventory and discussions around the fireplace. With regards to your financial plan, this season encourages a review of your estate plan and engaging in conversations with family and loved ones – reflecting on both the past and the future.
-
Spring
This is a season of sowing seeds to reap a future harvest and excitement as the first blooms appear. During our lives, we also experience seasons of newness. Perhaps it is a new marriage, a new child, or a new job. Each “new” event requires special attention and creates an opportunity to “plant” within your financial plan. For example, you may wish to revisit your beneficiary designations and estate planning after a marriage, start saving for future education expenses after welcoming a child, or make changes to your benefits and evaluate any cash flow updates after accepting a new job. The to-dos are many during the springs of life, but the investments made are intended to pay down the road.
-
Summer
This is a season of growth, as well as careful maintenance and monitoring. There are many years during our lives that are characterized simply by following a routine. Perhaps you are in an established career, content with excellent work and life balance. During this season, the financial plan you placed in motion during the spring continues moving forward with periodic check-ins. Just as a garden requires regular weeding and pruning, your overall finances may require tweaks from time to time. Since some factors will be out of your control (like the amount of sun, rain, stock market returns, or even governmental policy), it is important to act where you can when needed (like utilizing fertilizer, rebalancing your portfolio, and meeting with your financial advisor) to ensure you are staying on track.
There is a line in the book of Ecclesiastes that says, “To everything, there is a season…”. If you need help evaluating your financial situation in light of your current season, contact Bridgeworth today.
This content does not constitute legal, tax, accounting, financial, or investment advice. Based on your specific circumstances, you are encouraged to consult with competent legal, tax, accounting, financial, or investment professionals. We do not make any warranties as to the accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
Before investing, investors should consider whether their home state or their designated beneficiary’s home state offers any state tax or any other benefits that are only available to residents of that state. Any state tax benefits associated with a 529 plan apply only to residents of the state sponsoring the plan. 529 plans value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.