Hardy Plumbing
July 05, 2006

$ & Sense


If you are one of the millions of men and women who have lost a spouse through death or divorce, then you know how difficult and painful an experience this is. What's more, you are not alone. According to Divorce Magazine, 43% of new marriages end in divorce, while the average age to be widowed in the United States is 56. With life expectancies reaching well past 80 years-old, this means that the surviving spouse may need to be personally responsible for the family finances for 40 or more years.

Every situation or reason for being on your own presents different financial challenges and scenarios. For example, one spouse, often the man, will take on the responsibility of the family's finances. As result, the women in these partnerships may not be fully involved in the management of family investments, cash flow, taxes and debts. Thus, the need for a thoughtful financial advisor may be especially critical for women.

The sudden emotional upheaval puts you in a precarious position for making sound financial decisions that will impact your well being for decades. It is natural to be afraid of the unknown, overwhelmed with all that is now required of you, embarrassed that you may not understand various financial concepts, and uncertain as to whom you can trust.

The most frequent and foolish mistake is rushing into major decisions before you have taken sufficient time to plan carefully with qualified financial and legal advisors and to consider the implications of those decisions.

Whether this life transition entails a substantial loss of income or a significant increase in assets, you need a new financial strategy for navigating the years ahead. Working with a qualified financial advisor, you need to answer three questions.

1. Where am I now? Take inventory of your assets, including inheritances and settlements, and establish their value and tax exposure. Also, take inventory of current cash flow from employment, social security, child support and portfolio or passive income.

2. Where do I need to be? Determine what your assets and cash flow must do for you to meet your needs and fulfill other goals you may have, such as providing for children or grandchildren.

3. How do I get there? Plot an investment strategy to provide sufficient income and capital appreciation; set up a budget to stay on course and work with your lawyer to write a new will. Also, consider other important decisions, such as the sale of your home or family business, along with your long-term goals.

With a careful financial advisor, you can get clear explanations of financial issues and develop a roadmap that can help you navigate in an orderly manner through the complexities of life changes. Working with someone you trust can help build courage and hope for the future and allow you to gain a better sense of control over your financial future.

If you would like to learn more, please call:

Michael Pellman, Financial Advisor-Retirement Planning Specialist, Riverhead, NY

631-284-5213

Michael.pellman@morganstanley.com

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