Leap Day Should Be a Financial Day Planning

29 Feb

FEB 29There’s a holiday for virtually everything these days, but Leap Day — the February 29 that shows up on the calendar once every four years — should be a national holiday of long-term financial chores.

It’s not as much fun as International Talk Like a Pirate Day (Sept. 19) or National Donut Day (June 3), but Leap Day is perfect for financial planning because most investors are taking a leap of faith when it comes to everything being all right with their financial life, and because most of these chores don’t need to be done more than once every four years.

Revisiting your financial documents and accounts with a special eye on updating information that has changed or become outdated may not help you immediately — which is why people let it drag for years or decades — but it pays off in avoiding headaches and much worse later.

1. Review and update insurance policies: Make sure beneficiary information is current, review and update appropriate coverage, and more.

For example, if your car was old the last time you checked coverage and now is four years older, it may no longer be worth paying for collision coverage, since the premium is high but the benefit has shrunk. If your teenaged kids have matured into college graduate students and are still on your policy, make sure their status has been upgraded so that you aren’t stuck paying new-driver rates.

Schedule an insurance review if you work with an agent, just to know the ins and outs of all of your coverages, because they change over time and most people don’t review the fine print.

2. Review and update your estate plan: Time passes, life moves on, laws are altered, circumstances change. Look at your will and estate plan to make sure it is current on the laws and your family situations; make sure your choice for an executor is up-to-date and appropriate.

Contact your attorney/estate planner to ask what would be different if they were doing the work for you today from when they set things up originally. If the state-of-the-art in planning represents a big improvement, upgrade your plan.

3. Check beneficiary information on retirement plans and workplace insurance coverage: Most people fill out the papers when they start a job and never change it. If you’ve been married, divorced, re-married or had other life changes, your beneficiaries may be out of date, especially your secondary or contingent beneficiaries. In a worst-case scenario, that means your benefits go directly to the wrong people, no matter what it says in your will.

4. Update your financial and health-care declarations: Talking to a lot of folks who have been through divorce — and having been through one myself in 2015 — it’s clear that most people forget to update durable powers of attorney, health-care proxies and more.

You don’t need a divorce for this to be a problem; many people make their parents the emergency decision-makers, which is fine in your 20s but not good in your 50s when your parents are much older and there’s a spouse and/or children in the picture.

5. Reconsider your asset allocation: Unless all of your money is in target-date funds or issues that change allocations as an investor ages, an asset-allocation plan is not “set it and forget it.”

“You’re four years closer to reaching retirement age, and a top-down review of your investment strategy is in order,” explained Barry Zischang of RBC Wealth Management. “This would start with an analysis of your asset allocation. Has market volatility, up or down, caused your allocation to drift from where we originally set it? As a result, are we now taking too much risk, or not enough? Is it now time to rethink the allocation all together, perhaps beginning to focus more on income and safety, and less on growth?”

6. Evaluate your financial adviser: Most people consider their portfolio and how they are doing when they have an annual review with their financial planner or money manager, but don’t really consider the relationship with the adviser itself.

This is not about portfolio performance, but rather about getting what you want. If the adviser hasn’t provided the level of assistance you think is necessary or warranted — and it’s their fault because you have given them sufficient information — it’s time for a sit-down. Explain what you are looking for, and take steps to improve the relationship.

Include a review of your tax expert in your Leap Day chores too. Ask about any different approaches you might take to help reduce or delay your tax burden.

Some people stay in bad advisory relationships for years. This kind of review will help make sure you are not one of them.

These six basic chores — some of which take several steps plus a meeting with a professional — may seem a bit steep to complete on Leap Day itself, but don’t let that stop you. Treat Leap Day as a starting point — with the intent of finishing in time for another once-every-four-years occurrence, the presidential election in November.

SOURCE: MARKET WATCH

Housing News January 2016

15 Feb

http://jeanethjimenez.housingtrendsenewsletter.com/HT-Content10-0

report with magnifier on a blue background

Real estate report 

How to PREPARE for a Home Inspection

12 Feb cooltext997596015

There are a number of things that can be done to prepare for a home inspection.  The buyer or real estate agent should work with the seller to ensure that:

  1. The utilities are turned on
  2. Pilot lights are lit for any heating or cooking appliances that will be inspected
  3. Heating units are accessible
  4. Electrical panels are accessible and unlocked
  5. The attic area is accessible and cleared of stored items
  6. Crawl space entrances are accessible and unlocked, and that they are not screwed or nailed shut
  7. Showers and bathtubs are free of stored or personal items
  8. Sinks and dishwashers are cleared of dishes, and the area beneath all sinks should be free of stored items
  9. Any pets are secured for the inspector’s safety
  10. All items and areas to be inspected are readily accessible

 
1.  The utilities are turned on.  
Electric, gas and all other utilities should be working so that your inspector can properly test and operate all the systems and components in the home. Some home inspectors may charge a fee to return to the home and inspect anything that they could not properly inspect or test the first time, so don’t overlook this!
2.  Pilot lights are lit for any heating or cooking appliances that will be inspected.
Home inspectors will NOT light pilot lights for stoves or heating units. These units need to be operational at the time of inspection. Put yourself in the inspector’s shoes for this one: would you want to walk into an unfamiliar home and ignite an appliance that may not have been properly maintained or repaired? For an inspector, it’s an invitation to a disaster or a lawsuit, and a home inspector WILL NOT take that chance.
3.  Heating units are accessible.
This means that the area around the furnace, boiler or other heating appliance is free of stored items and clutter. Your home inspector is not required to (and in most cases WILL NOT) move items away from the heating unit in order to do his or her job.
4.  Electrical panels are accessible and unlocked.
All electrical panels and sub-panels should be readily accessible so that the inspector can remove the panel cover and inspect the wiring within. Also, be aware that a home inspector may refuse to inspect an electrical panel if part or all of the panel or distribution box is wet, or shows signs of fire damage or short-circuiting.

5.  The attic area is accessible and cleared of stored items.
The attic of a home is a very important area. By inspecting the attic, a home inspector can diagnose the causes of roof damage or premature roof failure, mold, ice dams, and many other problems with the home. This area should be readily accessible. Your home inspector needs to be able to get into the attic, first of all. Scuttle holes, walk-up accesses and pull-down stairs should be unobstructed and free of stored items so that an adult male can enter freely. If access to the attic is gained through a closet ceiling, then the closet area should be free of clothing and other stored items in order to allow the inspector to place his ladder there and climb into the attic.

In the attic area, be sure that all areas of the attic are visible and accessible. Remember – a home inspection is a visible evaluation of the home….if it is not visible, it cannot be properly inspected.

6.  Crawl space entrances are accessible and unlocked, and that they are not screwed or nailed shut. Another important area of the home is the crawl space. Let’s face it…nobody likes to go down there. Crawl spaces hold all kinds of unsavory things: rodents, snakes and spiders, not to mention  plumbing, electrical and structural components that are rarely seen. So it stands to reason that the crawl space is one of the least maintained areas of a home, but one of the most important.  Be sure that your inspector can gain access to the crawl space to view the floor structure, wall structure and any plumbing or electrical components in that area of the home. If you contact a home inspector and they state that they do not inspect crawl spaces, look for another home inspector. But be aware that your inspector is within his rights to refuse to enter a crawl space if the area presents an obvious health hazard such as standing water, leaking sewage, evidence of rodent activity, evidence of snakes or other life or health-threatening situations.
7.  Showers and bathtubs are free of stored or personal items.One aspect of the plumbing inspection is running water into tubs, showers and sinks in order to look for leaks and obstructions, and to ascertain that the plumbing fixtures are in good working order. Obviously, if the tub is full of clothes or other items, your inspector will not run water into it and will not be able to properly inspect the plumbing components.

8.  Sinks and dishwashers are cleared of dishes, and the area beneath all sinks should be free of stored items. A home inspector needs to be able to see and freely inspect the plumbing and drainage components for sinks, dishwashers and garbage disposals. Be sure that the inspector is able to access these areas so that YOU can be sure that everything is in good working order.
9.  Any pets are secured for the inspector’s safety.Even chihuahuas can turn into Cujo when a new person shows up in their home. You, or the home seller, may think that the dog is not a threat, but bear in mind that the dog doesn’t know the home inspector, and the home inspector doesn’t know the dog. Unfamiliarity can sometimes breed contempt: the dog has never seen the inspector and may view him or her as a threat. Your inspector is there to sniff out problems in the home, and may not have an extra half-hour to gain Fido’s trust. It is always best to tie or otherwise secure any pets during a home inspection. An important note about cats; cats may not pose a threat to the inspector but cats love running out of the house and getting into the attic. Nobody want to spent hours looking for the lost cat. Please secure them too.

10.  All items and areas to be inspected are readily accessible.  This may seem redundant, after discussion about crawl space accessibility, attic accessibility, etc. But it bears repeating.

Home inspectors will not normally move items out of the way to inspect systems or components, and most inspectors will take pictures of obstructed areas to document that there were items in the way at the time of inspection in order to absolve themselves from litigation issues. So if an area is not accessible and visible, the home buyer is ultimately the person who is short-changed after paying several hundred dollars for an inspection.  In my experience, home inspectors are very qualified in general…rarely have I encountered a home inspector who doesn’t take their task seriously. But a home inspector is only as good as their accessibility.

Source: Certus Home inspection

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